basic infrastructure constraints, both physical and human. So far, the bulk of infrastructure was in the public sector. Public sector in India operating in a protectedset up has been largely subsidised by the Government. Since the launching of reform, Governmentis trying to reduce its borrowing which means that further subsidization will not bepossible. There is one area where there is a need for private sector and foreigninvestment to come in. Because of the long gestation period, and many socialimplications, the infrastructure sector compares unfavorably with manufacturing andmany other sectors. For this, specific policies in this area are need to makeinfrastructure attractive. Clearly, there is a wide gap between the potential demandfor infrastructure for high growth and the available supply. This is the challengeplaced before the economy, i.e. before the public and private sector and foreigninvestors. This can also be seen as an opportunity for a widening market andenhanced production The six core and infrastructure industries, viz., electricity, crude oil, petroleumrefinery products, coal, steel and cement, having a weight of 26.7 per cent in overallIndex of Industrial Production (IIP) achieved 6.8 per cent during 2000-01. Severalfiscal incentives were announced by the government for boosting investment ininfrastructure projects. Ten-year tax holiday offered to projects in core sectors likeroads, highways, waterways, water supply, sanitation and solid waste managementsystems can now be availed of during the initial 20 years. Projects in airports, ports,inland ports, industrial parks and generation and distribution of power can now availof 10-year tax holidays during the initial 15 years
The Critical Steps:-A-A Strong Government with Clear direction
"Once committed to a focus on economic growth, some good policy decisions wereimplemented quickly and efficiently While India's corporate leaders agree that thiscould be true, they are emphatic that India's vibrant democracy is the only way forthe country to ensure that growth and development reaches all. There is chaos in it and sometimes policy decisions tend to be reversed. Butultimately India's democracy is essential for the country's welfare,But come what may any party Govt. may come or go but the direction of development of Infrastructure may not be altered.
B- A consistent and thoughtful marketing effort
We need to sell India. A USP is what is needed.India's corporate leaders agree that the country's politicians have never sold thecountry.Much of the investment flowing into the country today is on the back of India'sreputation as a place for skilled people who have proven themselves in theinformation technology services sector.
C-Bringing in the Money (FDI and Private Participation)
. The importance of infrastructure sector also follows from the fact that foreigninvestors are now looking at infrastructural development as a yardstick for directingtheir investments. In fact infrastructural development had taken precedence overwage levels in assessing the investment potential in developing countries. In Indiainfrastructure sector itself is becoming an attractive investment area for FDIs.Already there is a huge demand for funds from the manufacturing sector. On top of that is the demand from the infrastructure sector. Both draw heavily from the savings