Infrastructure

Last Updated: June 2010

The country’s core sector, comprising six key infrastructure industries, accelerated by 5.1 per
cent year-on-year in April 2010, compared with 3.7 per cent in April 2009, according to the data
released by the Union Ministry of Commerce and Industry. The growth was primarily led by an
increase in the production of cement, which stood at 18.87 million tonnes (MT), compared to
17.36 MT during April 2009.

Electricity production grew by 6 per cent in April 2010, as against 6.7 per cent in the same
month of the previous fiscal. Finished steel production registered a growth of 4.7 per cent during
the month, against a decline of 1.3 per cent in the corresponding period of 2009. Among other
industries, production of crude petroleum rose by 5.2 per cent, as against minus 3.1 per cent,
while production of petro-products registered an increase of 5.3 per cent, as compared to a
contraction of 4.5 per cent during April 2009.

Infrastructure investment in India is set to grow dramatically. As per Union Minister for Finance,
Mr Pranab Mukherjee, India would require to develop a rupee-denominated long-term bond
market for funding the infrastructure sector that requires an investment of around US$ 459 to
US$ 500 billion by 2012.

Further, investment in the infrastructure sector is expected to be around US$ 425.2 billion during
the Eleventh Five Year Plan (2007-12), as against US$ 191.3 billion during the Tenth Plan.
Meanwhile, private investment into the sector is also projected to increase to US$ 157.3 billion
in the Eleventh Plan, as compared to US$ 47.84 billion in the Tenth Plan. This investment is
likely to be fulfilled through public-private-partnership (PPP) projects that are based on long-
term concessions.

Clearance has been given to nine new investment proposals of around US$ 1.05 billion by the
State Level Single Window Clearance Authority (SLSWCA). Out of these nine proposals, five
were from the cement sector, two for setting up aluminium conductor units, and one each for
developing a petroleum coke plant and a maize processing unit.

Meanwhile, a committee on infrastructure under Prime Minister Dr Manmohan Singh will

conduct quarterly review of development of power, road, ports, civil aviation and railways
sectors, announced the Planning Commission of India recently. Further, the cabinet committee
on infrastructure (CCI) will handle specific infrastructure cases that may require necessary policy
correction or solving issues affecting projects.

Notably, truck sales, a key indicator of goods movement, registered a growth of 74 per cent
during May 2010, as per the data released by the Indian Foundation for Transport Research and
Training (IFTRT). The increase in the demand for cargo transportation from the agricultural and
manufacturing sectors was one of the contributing factors in the increase in the truck sales.
In order to develop eco-friendly infrastructure for new cities in the Delhi-Mumbai Industrial
Corridor (DMIC), Japan-based consultants such as Nikken Sekkei, Mitsubishi and IBM Japan
would work along with DMIDC and three state governments. The project, expected to be
completed by 2018, as per Mr Anand Sharma, Union Minister for Commerce and Industry is “by
far the world’s biggest infrastructure project.”

Ports

The major ports in India handled 45.8 million tonnes cargo in February 2010, as compared to
45.2 million tonnes in February 2009. The cargo growth during April-February 2010 registered
an increase of 5.5 per cent as compared to the corresponding period in the 2009 fiscal, as per data
released by the Indian Ports Association (IPA).

The annual combined capacity of the major and non-major ports in the country will be 1.5 billion
tonnes by 2012, stated by Minister of Shipping, Mr G K Vasan, while speaking at the Logistics
Outsourcing Summit organised by the Confederation of Indian Industry (CII).

The Union Cabinet has given the approval to the Shipping Ministry for declaring Andaman and
Nicobar ports as major port, stated Union Minister of Shipping, Mr G K Vasan.

The Cabinet Committee on Infrastructure (CCI) has approved a proposal to develop the fourth
container terminal at the Jawaharlal Nehru Port (JNPT), the country's busiest port, at an
estimated cost of US$ 1.44 billion. The government also cleared a proposal to build standalone
container handling facility at Mumbai port at a cost of US$ 129.6 million. The project would be
implemented within two years from the date of the award of the project.