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Tuesday, March 23, 2010

Telecom may fill power, road investment gaps: Montek

Poor performance in the power, road and port sectors has resulted in actual investment in infrastructure falling below the level envisaged in the Eleventh Plan period despite a robust growth in telecom, Planning Commission deputy chairman Montek Singh Ahluwalia has said.

The mid-term appraisal (MTA) for the Eleventh Plan will redefine priorities and suggest mid-course correction for each sector to make up some of the lost ground in the remaining plan period.

Infrastructure investment in the Eleventh Plan (2007-12) is expected at little less than the $500 billion targeted for the plan. It will have to more than double in the 12th Plan if the economy is to grow at 9% plus during the period, the mid term appraisal report to be cleared by the Plan panel on Tuesday has pointed out.

“It does look as if we will achieve (investment in infrastructure sector) not fully, but very close to $500 billion...This will be primarily because of over achievement in telecom,” Planning Commission deputy chairman Montek Singh Ahluwalia said responding to questions from the media ahead of the Centre-state meet on infrastructure also scheduled on Tuesday.

Both the port and the power sectors would definitely miss the Eleventh Plan targets. The power ministry has already scaled down power generation target of 75,000 mw during the five year period to 62,000 mw.

Similarly, there was a slump in the road sector because of the over-all slowdown. At the beginning of August 2009, 143 road transport and highways projects were running behind schedule.

About 4,000 kms of connectivity is likely in 2009-10 which is expected to go up to 7,000 km in 2010-11, he said. “In the road sector we are well set to have two years of good increased momentum.”

On growth prospects during the Eleventh Plan, Mr Ahluwalia said it was likely to be 8.5% in 2010-11 and 9% during 2011-12, the last year of the Eleventh Plan.

With the economy slowing down in the past two years, fresh projections for the remaining two years suggest that the average growth during the eleventh Plan period will only be a little above 8%.

The MTA calls for more than doubling of investments in infrastructure during the 12th Plan period to help achieve the targeted GDP growth rate of 9%, the same level as was envisaged for the Eleventh Plan.

It goes on to say that half of the envisaged investments of $ 1,024 billion has to come from the private sector and the policies will have to ensure that the sector remains attractive.

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