India’s Prime Minister Narendra Modi has been pushing hard to attract global investors to India, and while the government is working to ease this process, bottlenecks in infrastructure projects remain it’s biggest challenge. CCTV America’s Shweta Bajaj reported this story from new Delhi.
Modi has plans to build 100 smart cities, bullet trains, highways, high-speed networks, and power plants, however nearly 50 percent of India’s infrastructure projects are either delayed or stalled.
“The reasons why projects are being delayed… has to do with a number of regulatory clearances of policy uncertainty, issues related to governance essentially which is not creating the right environment for projects to be completed, to be executed efficiently and be completed on time,” said Subir Gokarn, the director of research at Brookings Institution in India. “If they are not completed to time, they become financially unviable, and that is causing other problems.”
Of the 239 big infrastructure projects in India, nearly 100 are running behind schedule, and of the total investment needed, only 46 percent has been procured.
Even projects that are completed, revenues are significantly short of projection due to a slowdown of the Indian economy, which saw less than 5 percent growth in fiscal year 2013-2014.
China’s proposed Asian Infrastructure Investment Bank could help India bridge the deficit in investment in infrastructure.
“China is the best-endowed economy in Asia, which has the maximum resources to finance such a bank and India will… be certainly one of the largest borrower from such a bank, because India’s infrastructure needs are the maximum,” said Gokarn.