Infrastructure 'sine qua non' for robust growth: Survey

Terming infrastructure as "sine qua non" for achieving robust growth, the Economic Survey 2015-16 said government has accorded top priority to the sector and has undertaken a slew of steps to augment it.
The Survey, presented in Parliament by Finance Minister Arun Jaitley, however expressed concern over stressed advances of the infrastructure sector which increased to 24 per cent in June 2015, from 22.9 per cent in March 2015.
Underlining that the Survey comes at a time of unusual volatility in the international economic environment with market swinging on fears that the global recovery may be faltering, the government said India stands out as a haven of stability and an outpost of opportunity.

"Its economic growth is amongst the highest in the world, helped by a reorientation of government spending toward needed public infrastructure," the Survey said.
"Many policy measures taken by the government ... Have started showing its impact on increased FDI inflows, better performance of infrastructure sector. The landmark initiatives like Make in India...Would also help in transforming infrastructure sector which is sine qua non for achieving and sustaining higher economic growth," it said.
Enhanced public investment in infrastructure has been emphasised to 'crowd-in' private investments, the Survey said.

It said development of the infrastructure sector has been a priority area for the government and has witnessed enhanced public investment.

"Many reforms have been initiated in the infrastructure sector, resulting in robust growth in most of the sectors. Major infrastructure sectors, namely power, road, railways, civil aviation, ports and telecommunication, have performed better during 2014-15 as compared to 2013-14," it said.
Electricity generation in the country during the current year registered a growth of 4.4 per cent, it said adding, a total of 3030 MW of grid-connected power generation capacity from renewable energy sources like solar and wind has been added so far this fiscal, taking the cumulative generation capacity in the country to over 38,820 MW from the sources.

The contribution of five sub-sectors -- mining, iron and steel, textiles, infrastructure and aviation (which together accounted for 24.2 per cent of the total advances of SCBs as of June 2015) to the total stressed advances was 53 per cent.
"Stressed advances in the aviation sector increased to 61 per cent in June 2015 from 58.9 per cent in March 2015, while stressed advances of the infrastructure sector increased to 24 per cent from 22.9 per cent during the same period," it said.
The Survey said the performance of these sectors and their impact on the asset quality of banks continue to be a cause for concern.

The Survey stressed on the need to increase public
investment further to address a pressing backlog of infrastructure needs.
"Such an increase would merely return spending to its 2010-11 level of around 2 percent of GDP, well below the level in other emerging markets," it said.
With increasing urbanisation, opportunities as well as challenges related to urban infrastructure are also increasing, it said.
"In this context, the government has taken various steps to improve urban infrastructure... A number of initiatives have been taken to encourage public transport, for example Bus Rapid Transit Systems (BRTS) approved for 11 cities under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM), to equip buses with Intelligent Transport System (ITS) and Metro Rail projects," the Economic Survey said.

On smart cities it said, under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) the government will spend Rs 50,000 crore for five years from financial year 2015-16 to 2019-20.
For Indian Railways, the government said it is making all efforts to tap innovative methods of financing, besides generating internal surplus and attracting FDIs.
Apart from the proposed Rs 97,636 crore Mumbai-Ahmedabad corridor project, feasibility study is on for Delhi-Mumbai, Mumbai-Chennai, and Delhi-Kolkata corridors, it said.
To augment road infrastructure in far-flung tough terrains, border and coastal areas, the government proposes to spend Rs 2.67 lakh crore under Bharatmala project.

For shipping sector it said it has initiated steps to augment India's fleet and enhance capacity of major ports.
On coal the government said, due to higher domestic production, imports have been coming down since last year.
"Production of raw coal in the country during April-December 2015 was 447.48 million tonnes, compared to 427.27 million tonnes during the corresponding period of the previous year, registering a growth of 4.7 per cent," it said.
On steel it said, the government has taken steps such as safeguard duty, anti-dumping duty and minimum import price to check surging steel imports, but further protection will impact the downstream industries.

It government said that the growth of industrial sector broadly comprising mining, manufacturing, electricity and construction is estimated to be 7.3 per cent with manufacturing sector growing at 9.5 per cent.
The mining, manufacturing and electricity sectors grew by 2.3 per cent, 3.1 per cent, and 4.5 per cent, respectively during April-December 2015-16, the Economic Survey noted.
Highlighting the role of Foreign direct investment (FDI)
as an important driver of economic growth, the Survey stated that the government has undertaken various reforms with a view to liberalising and simplifying the FDI policy to provide ease of doing business climate in the country that will also lead to larger FDI inflows.

"More open FDI policy has been adopted with FDI allowed for defence sector up to 49 per cent; railways 100 per cent; insurance and pension 49 per cent, etc," it said.
After the launch of the Make In India initiative in September 2014, there is a nearly 40 per cent increase in FDI inflows during October 2014- June 2015 over the corresponding period of the previous year, the Survey said.
During April- November 2015, total FDI inflows were USD 34.8 billion as compared to USD 27.7 billion during April- November 2014, showing an increase of 26 per cent, it added.

Recognising the growth of telecommunications as one of the key drivers of socio-economic development, the Survey said the performance of the telecommunications sector during 2015-16 has been encouraging with approximately 33.4 million new telephone connection during April - October 2015.
It said that supply side bottlenecks, infrastructural and structural constraints hindering the achievement of medium-term growth and job creation, are being addressed on priority basis.
Programmes like Make in India, Ease of Doing Business, Skill India, Startup India and reforms in various industrial and infrastructure sectors are some of the major initiatives in the direction of attracting more investment to ensure high industrial growth, the government said.
Make in India and Ease of doing business in India are focusing on more and faster industrial growth while Startup India aims at nurturing an entrepreneurial mind set among youth in an in inclusive manner.