Better infrastructure key to growth: CII

Choked ports, over-burdened roads and the tourism industry's irrational tax structure are blocking economic growth, according to the Confederation of Indian Industry (CII).

"Improvement in infrastructure like roads and highways, seaports, railways, civil aviation, and tourism, and removing bottlenecks, is the key to attaining a higher growth rate and attract foreign direct investment to India," the CII said.

Roads and highways are facing a severe capacity constraint. The length of national highways, which is less than two per cent, bears the brunt of 40 per cent of the traffic, it said. The CII suggested that an autonomous regulatory authority could be set up for the road sector.

Even though ports act as a major gateway to the country's trade, accounting for almost 95 per cent of India's trade by sea, there is a distinct lack of coordination among various transport ministries and central and state governments, the CII said.

There should be segregation of the roles of policy making, regulation and operation at the ports, the CII said, adding that the ministry of ports should make policy and the private sector should be left with the operational part.

Favouring a 'Landlord port concept', the CII suggested the government hold the ownership of ports but lease out the port terminals to the private sector for operation and management.

Even though Indian Railways is the second-largest in the world, the government allots more funds to sectors like roads and highways.

"There should be rationalisation of tax structure in the tourism industry and the total tax should not exceed 15-20 per cent," it said.