1. INFRASTRUCTURE
DEVELOPMENT IN INDIA

2. “ Expanding investment in infrastructure can
play an important counter cyclical role.
Projects and programmes [are] to be reviewed
in the area of infrastructure development,
including pure public private partnerships, to
ensure that their implementation is expedited
and does not suffer from [the] fund crunch.”
Mr. Manmohan Singh, Indian Prime Minister,

3. Definition
The Rangarajan Commission indicated six
characteristics of infrastructure
sectors,
2. Natural monopoly
3. High-sunk costs
4. Non-tradability of output
5. Non-rivalness (up to congestion
limits) in consumption
6. Possibility of price Exclusion
6. Bestowing externalities on society.

4. Government is committed to
PPP mode- Why?
 Maximizing investment
 Budgetary constraints
 Development of assets of world class
standards
 Improved maintenance and management of
assets
 Provision of efficient services
 Affordable prices through greater
competition
 Risk Sharing

5. Country Program Description
Brazil Growth This strategic investment
program oversees and
Acceleration approves initiatives and public
Program works investment. PAC, the
first phase of the program
launched in 2007, invested
$349 billion in areas, including
CHINA 12th Five-Year energy, urban began in 2011, is allocating some $1
The 12th Five-Year Plan, which infrastructure,
sanitation, spending over five years. The program is
trillion in infrastructure and transportation.
Plan PAC-2byis Central Committee with help from the Ministry of
developed the a $900 billion
extension of the PAC of the investment will
Housing and Urban-Rural Development. Much program
for 2011–2014. with a secondary emphasis on
go toward building high-speed rail,
water supply, electricity, and highways
INDIA 11th and 12th The 11th Five-Year Plan, which began in 2007, is developed and
implemented by India’s Planning Commission. Of the plan’s
Five-Year Plans estimated $500 billion in total infrastructure investment,
one-third will flow to roads, including a project to upgrade,
rehabilitate, and widen major highways in India. The rest will be
spent on transit, water, electricity, and other
infrastructure sectors. The country’s 12th Five-Year Plan, which runs
from 2012 to 2017, will double the amount spent on infrastructure
to $1 trillion.

9. Budget 2012-Infrastructure Sector gets
major boost

10. Size – Power Sector
•Generation capacity of 122 GW; 590 billion units
produced (1 unit = 1kwh)
-CAGR of 4.6% over the last four years.
•India has the fifth largest electricity generation
capacity in the world
-Low per capita consumption at 606 units; less than
half of China
•Coal-fired plants constitute 57% of the installed
generation capacity, followed by 25% from hydel
power, 10% gas based, 3% from nuclear energy and
5% from renewable sources

11. Structure of power sector
•Majority of Generation, Transmission and
Distribution capacities are with either public
sector companies or with State Electricity
Boards (SEBs).
•Private sector participation is increasing
especially in Generation and Distribution
- Distribution licences for several cities are
already with the private sector
- Many large generation projects have been
planned in the private sector

12. Policy- Power sector
•100% FDI permitted in Generation, Transmission &
Distribution - the Government is keen to draw private
investment into the sector
•Policy framework in place: Electricity Act 2003 and
National Electricity Policy 2005
•Incentives: Income tax holiday for a block of 10 years
in the first 15 years of operation; waiver of capital
goods import duties on mega power projects (above
1,000 MW generation capacity)
•Independent Regulators: Central Electricity
Regulatory Commission for Central PSUs and inter-
State issues. Each State has its own Electricity
Regulatory Commission.

13. KeY Players-Power Sector
Major Players Capacity G T D
Public sector
NTPC 23,749 Yes No No
National Hydro Yes No No
Electric Power 3615
Corporation
NPC Yes NO No
2770
Domestic Private sector
Tata Power 2203 yes yes Yes
RPG Group - CESC 1005 Yes yes Yes
Reliance Energy 885 yes yes Yes
International Private Sector
China Light and 655 Yes No No
Power (CLP)
Marubeni 330 yes No No
Corporation
•G - Generation •T - Transmission •D - Distribution

14. Opportunity
•Over 150,000 MW
of hydel power
is yet to be tapped
in India
•India requires an
additional 100,000
MW of generation
capacity by 2012

15. Potential
•Large demand-supply gap: All India average energy shortfall of 7% and
peak demand shortfall of 12%
•The implementation of key reforms is likely to foster growth in all segments:
- Unbundling of vertically integrated SEBs
- “Open Access” to transmission and distribution network
- Distribution circles to be privatised
-Tariff reforms by regulatory authorities
•Opportunities in Generation for:
- Coal based plants at pithead or coastal locations (imported coal)
- Natural Gas/CNG based turbines at load centres or near gas terminals
- Hydel power potential of 150,000 MW is untapped as assessed by the
Government of India
-Renovation, modernisation, up-rating and life extension of old thermal and
hydro power plants
•Total investment opportunity of about US$ 200 billion over a seven year
horizon

16. ROADWAYS
• India has second largest Road
network, in the world.
• Total length is 33 lakh kms
• Carry 65% of fright & 80%
passengers
•National highway constitute
only 1.7% of roads but carries
about 40% of traffic
•Annual projected growth is
12-15% for passenger traffic &
15-18% for cargo traffic

17. ROADWAYS (cont.)
• Important Development projects
-The Golden Quadrilateral (GQ-5846 kms of 4 lane
highway)
- North-South & East-West Corridor (NSEW-7142 kms
of 4 lane highways)
- Four-laning of 12,109 km under NHDP-III
-Program for 6-laning of 6,500 km of National Highways
under NHDP- V.

18. Roadways (cont.)
Investment plan

19. Railways
• About 64000 km of rail
network
• Connects 7083 stations
• Carry 2.20 crore
passengers & 2.50
million tones of goods
everyday
• About 1.5 millions of
workforce

20. Railways
• In 1947 rail network of about 53000
km
• Added only 11000 km of network in
last 65 years
• Modifications like-
-Gauge changing
-Electrification
-Computerization
-Double tracks

21. Investment Plan
• Investment of Rs. 57630 cr the year
2011-12 for the development, highest
ever by Indian railways in any financial
year
-Target of laying 1075 km of new lines
in 2012
-800 km of gauge conversion
-700 km of Doubling of lines

22. MISSION 2020 OF INDIAN
RAILWAYS
• High speed rail travel
• Raising the speed of regular
passenger trains from 100-130 khph
to 160-200 kmph
• To develop 50 world class stations
which can be recognized
internationally
• Segregating passenger and freight
tracks completely

23. DMIC project
• Mega infrastructure project of USD 90
billion
• To connect Delhi & Mumbai through
road and railway network of 1483 km
• Delhi, U.P., Haryana, Rajasthan,
Gujarat, Maharashtra this states will
be connected to form a corridor of
international standard.

24. Oil & Gas
• India 5th largest Consumer of energy
• About 5.7 billion barrels of proven oil
reserves.
• FDI worth US$ 3, 332.78 million
during April 2000 to December 2011

25. Market Dynamics
Production Consumption
• Crude oil 31.87 MMT • Diesel 1.44 million b/d.
from April-Jan 12.
• Petrol 388000 b/d.
• Natural Gas 40157
• Gas 58 BCM
MCM
• 1.04 million barrels per
day
• Gas 50 BCM

26. Developments & Investments
• KG Basin-Reserves of 56.6 BCM.
• Reliance Industries J- 3 mega
petrochemical Project
• IOCL to set up refinery in Gujarat
• ONGC & IOCL seeking refinery options
in Srilanka
• Petronet LNG Ltd planning to set up
its third terminal in the east coast of
India.

27. Government Initiatives
• Indian Government has encouraged Saudi
Arabia to get involved in the country's
petroleum upstream and downstream sector
• OPaL's Petrochemical project at Dahej,
OMPL's Petrochemical project at Mangalore,
IOC's LNG project at Ennore, Bharat
Petroleum Corporation's LNG terminal at
Kochi, Hindustan Petroleum Corporation's
grass-root refinery in Visakhapatnam.

28. Road Ahead
• Mr S Jaipal Reddy, Junior Oil
Minister, India, expects investments
worth US$ 75 billion in South Asian
nation's oil and gas sector from
April 2012 to March 2017
• Eventually, the development plan
will also cut India's import bill.

29. Telecommunication
• 3rd largest in the world & 2nd largest
in Asia.
• Mobile subscriber base-936.12
million.
• Overall Tele- density 77.57%
• Broadband Subscriber 13.42 million

30. Market Dynamics
• The Indian handset market made a volume
sale of 182 million.
• The Indian handset market is led by Nokia
with 37.2 per cent market share, followed by
Samsung (14.9 per cent), G'Five (7.5 per cent)
and Micromax (5.8 per cent).

31. Key developments & Gov.
Initiative
• Complaint centre by TRAI
• Hybrid power
• Easier & standardized municipal laws for
Towers
• Subsidy for Solar panels & use of
nonconventional resource of energy.
• Increased trend of sharing infrastructure.

32. NEED FOR INFRASTUCTURE
DEVELOPMENT IN AIRPORTS
• Air traffic has increased rapidly in recent years,
although this slowed in 2007.
• A number of Indian airlines have faced challenging
market conditions in 2008
• Indians are still flying in much greater numbers.
• Estimates made in 2007 by the Indian
Government’s Committee on Infrastructure
suggest that passenger traffic will grow at a CAGR
of over 15% in the next 5 years

33. AIRPORT DEVELOPMENT PLAN
(During the XI Plan Period 2007-12)
• Main Objectives
– To boost Infrastructure in Aviation sector.
– To provide World-Class infrastructure facilities.
– To meet the increased demand by enhancement
of Aircraft/Cargo handling capacity.
– To provide safe Air Traffic Services.
– To achieve efficiency by improving Air Traffic Flow
Management.

34. INVESTMENT BY AAI
XI Plan (2007-12)
– Planned Investment $10 billion .
– Financing
• Mainly through Internal Resources
• Relatively small portion through Budgetary
Support
• Balance through Borrowings.
• Issue of Bonds in Domestic Market.
• Exploring Loan from JBIC/World Bank.
– Credit Rating
• Awarded AAA stable by CRISIL and L AAA by
ICRA for AAI Bonds.
• Awarded A1+ by ICRA for Short‐term Loan/
Commercial Papers

35. STEPS TAKEN BY GOVERNMENT FOR
DEVELOPING AIRPORTS
•The Airports Authority of India (AAI) manages and
operates 126 airports and 329 airstrips
•The Government established the Airport
Economic Regulatory Authority (AERA)
•State governments are also getting involved and
looking to facilitate the development of new
airports.
•The total investment on new airports has been
proposed at about $10 billion by 2012.
• Greenfield airport projects are planned in resort
destinations and emerging metros
•Further, 35 non-metro airports are proposed for
development.

36. NEED OF DEVELOPMENT OF PORTS
• With 12 major ports and 187 minor ports, 7,517 km long
Indian coastline plays a pivotal role in the maritime
transport helping in the international trade
• Increasing connectivity with inland transport networks is
challenges currently facing India’s ports
• which have seen massive swells in the amount of goods
transported.
• Traffic is estimated to reach 877 million tonnes by
2011-12, and containerised cargo is expected to grow at
15.5% (CAGR) over the next 7 years.
• India’s existing ports infrastructure is not sufficient to
handle the increased loads – cargo unloading at many
ports is currently inadequate, even where ports have
already been modernised

37. STEPS TAKEN BY GOVERNMENT FOR
DEVELOPING PORTS
• An estimated investment of around $22 billion is targeted for port
projects in the five year period from 2007-12.
• The National Maritime Development Programme includes 276 projects,
with a required investment of about $15 billion over the next ten years,
with private investment targeted at around $8 billion.
• Projects related to port Development will provide a major opportunities
for E&C companies.
• Recent deregulation of the sector now permits 100% FDI, and an
independent tariff regulatory authority has been set up to facilitate
projects at major ports.

38. Infrastructural requirement
scenario in India
• Urban population is expected to grow
about 50% by 2025
• Growth in GDP is predicted to be 8-9% per
annum
• Road Traffic growth will be 15% per year
• Air traffic is growing by 25% per year
• 101,000 MW of new power needed by
2012
• Sanitation Coverage is only 35% currently

39. Steps taken in the 11th
5- year plan 2007-2012
Actions taken in the 11th 5 year plan – 2007-2012:
• The amount of money spent on infrastructure will be
raised to 8% of GDP (earlier, infrastructure spending
was only 4.6% of GDP)
• One Half of all new investments in the 11th plan will
be in infrastructure
• The planning Commission has estimated that a total
investment of $450 Billion in infrastructure is required
over the next 5 years to meet India’s infrastructure
needs.
• Port capacity will be increased from 520MT to 800MT
• 60000 MW of new power is to be added by 2012

40. Steps taken for infrastructural
development
• IIFC - India Infrastructure Finance
Corporation
2. Setup to fund infrastructure funds in India &
is owned by government.
3. Will lend money at low rates to public and
private infrastructure projects
4. Would be able to borrow at low rates as they
are guaranteed by GoI.
• Government has started the Jawaharlal
Nehru National
Urban Renewal Mission (JNNURM) to
improve Urban infrastructure

41. Conclusion
• Infrastructure inadequacies in both rural and
urban areas are a major factor constraining
India's growth.
India needs a lot more infrastructure to meet
its needs.
• The government is focusing on this and has
created a set of programs and reforms
aimed at addressing this issue.