Akash Prakash’s concerns over lack of investor confidence in the creation of public infrastructure in India has missed certain critical aspects (“Who will build India’s infrastructure?” September 14). First, till just about 10 years ago, it was the government alone that was responsible for investments in roads, ports, electricity, airports and so on. Even now, the state’s predominance in this sector cannot be undermined. The private sector’s share is still a meagre 20 per cent. Therefore, India will continue to see more and more public investment in the creation of infrastructure even if private investors focus only on the bottom line and a return-on-investment of 20 per cent while evaluating public sector projects.
The telecom sector saw a revolution that certainly can’t be derided. Nevertheless, it is worth reiterating that the spread of mobile telephony had less to do with the ingenuity and investment initiative of the private sector, and more with the obvious fact that it promised immediate and rich returns to telecom companies riding high on the 500-million subscriber base (a conservative estimate) that the sector promised. Also, there were no pains associated with long gestation periods and construction risks with high capital costs that a typical public infrastructure project has to endure. So, it is no surprise that private investors jumped in notwithstanding the fact that there was tough regulation by the government.
It has been amply demonstrated by the Delhi Metro – a public investment project with 100 per cent government equity – that public infrastructure can be efficiently engineered and delivered by the public sector. The government will have to continue to shoulder its responsibilities in the public infrastructure domain since, unfortunately, for the country, the private sector’s focus is more on balance-sheet building rather than nation building.
Kalpana Dube, Lucknow
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