Regulatory and institutional structure of the Telecom sector

Summarise the regulatory framework for the communications sector. Do any foreign
ownership restrictions apply to communications services?

The regulatory and policy framework encompassing the communications sector in India
comprises a number of statutes, rules, regulations, guidelines, etc, laid down by the government
of India. The primary statutes regulating the sector include:

 the Indian Telegraph Act 1885 (the Telegraph Act);

 the Indian Wireless Telegraphy Act 1933 (the Wireless Act);

 the Telecom Regulatory Authority of India (TRAI) Act 1997 (the TRAI Act);

 the telecoms policy amended from time to time, the latest being the National Digital
Communications Policy 2018 (the NDCP 2018), which was approved in September 2018;

 the Broadband Policy 2004; and

 the Information Technology Act 2000 (the IT Act).

The Telegraph Act is the primary legislation underlying the telecommunications regulatory
framework for India and prescribing various powers of the government to operate and regulate
telecoms services in the country. Under the current regime, the task of granting licences and
approvals to telecoms players for providing telecoms services in India has been assigned to the
Department of Telecommunications, the Ministry of Communications and Information
Technology (DoT). The DoT formulates and implements the telecoms licensing regime, under
which licences and approvals are granted to corporations to carry out telecoms services.

The Wireless Act was formulated and implemented to regulate wireless communication and the
possession of the concerned wireless telegraphy apparatus. It has been explicitly stipulated that
the possession of any apparatus, appliance, instrument or material used or capable of use in
wireless communication requires a licence from the DoT to that effect. A penalty has been
prescribed for possession without the requisite licence.

In 1997, the government passed the TRAI Act and set up TRAI as the regulatory authority for the
telecoms and broadcasting sector with the power to make policy recommendations on related
issues. The TRAI Act also provides for the adjudication of disputes between the telecoms
licensees and the DoT through the Telecom Disputes Settlement and Appellate Tribunal
(TDSAT).
The DoT is responsible for formulating Policy Frameworks aimed at accelerating the growth of
the telecommunication services. Recognising that provision of world class telecommunications
infrastructure is the key to rapid socio-economic growth of the country, the government has been
announcing its telecom policy statements at regular intervals since the onset of market
liberalisation in the country in the early 1990s. In effect, post-liberalisation the Indian telecom
sector has been shaped by five policy statements:

 National Telecom Policy 1994;

 New Telecom Policy 1999;

 Broadband Policy 2004;

 National Telecom Policy 2012 (NTP 2012); and

 National Digital Communications Policy 2018.

The NDCP 2018 seeks to unlock the transformative power of digital communications networks -
to achieve the goal of digital empowerment and well-being of the people of India; and towards
this end, attempts to outline a set of goals, initiatives, strategies and intended policy outcomes.
The NDCP 2018 aims to accomplish the following Strategic Objectives by 2022:

 provisioning of Broadband for All;

 creating four million additional jobs in the digital communications sector;

 enhancing the contribution of the digital communications sector to 8 per cent of India’s
GDP from approximately 6 per cent in 2017;

 propelling India to the Top 50 Nations in the ICT Development Index of ITU, from 134
in 2017;

 enhancing India’s contribution to Global Value Chains; and

 ensuring digital sovereignty

The vision of the government as stated in the NDCP 2018 is to fulfil the information and
communication needs of citizens and enterprises by establishment of a ubiquitous, resilient,
secure and affordable digital communications infrastructure and services; and in the process,
support India’s transition to a digitally empowered economy and society. In pursuit of
accomplishing the above-mentioned objectives by 2022, the NDCP 2018 envisages three
missions:

 Connect India: creating robust digital communications infrastructure to promote

‘Broadband for All’ as a tool for socio-economic development, while ensuring service
quality and environmental sustainability;

 Propel India: enabling next generation technologies and services through investments,
innovation and intellectual property rights (IPR) generation to harness the power of
emerging digital technologies, including 5G, AI, IoT, cloud and big data to enable
provision of future ready products and services; and to catalyse the fourth industrial
revolution (Industry 4.0) by promoting investments, innovation and IPR; and

 Secure India: ensuring sovereignty, safety and security of digital communications to

secure the interests of citizens and safeguard the digital sovereignty of India with a focus
on ensuring individual autonomy and choice, data ownership, privacy and security, while
recognising data as a crucial economic resource.

Apart from the above-mentioned legislation, the Foreign Direct Investment (FDI) Policy, as
amended from time to time, lays down the foreign investment and ownership restrictions for the
sector. The government prescribes the threshold limits of investment, entry routes and other
conditions for such investment under the FDI Policy, as amended from time to time. The FDI
Policy segregates various services on the basis of foreign investment allowed, regulated and
prohibited. Presently, with regard to the foreign investment in entities engaged in the telecoms
services, although FDI up to 100 per cent is permitted for most of the telecoms services, certain
service-specific conditions and entry restrictions for the investment coming from outside India
may apply. Any amount of investment beyond 49 per cent in the telecoms entity would require
the prior approval of the government. In November 2017 the DoT issued internal standard
operating procedures for scrutiny of FDI cases in the DoT as well as a checklist.

Authorisation/licensing regime
Describe the authorisation or licensing regime.

The licensing regime for the provision of the telecoms sector witnessed a sea change in 2013 with
the introduction and implementation of the ‘unified licence regime’. The unified licence regime
has been implemented primarily with the objective of ‘one nation, one licence’, as envisaged
under the NTP 2012. It replaces the earlier regime where the players were required to obtain
separate licences for different telecoms services in India, such as internet services, national long-
distance (NLD) services, international long-distance (ILD) services and so on.

The unified licence regime for the first time allows telecoms operators to offer all telecoms
services under one licence, subject to separate service authorisation for the provision of different
telecoms services, covered by the unified licence. The unified licence covers within its ambit all
the fixed, mobile and satellite services and communication both on wireline and wireless media
with full mobility, limited mobility and fixed wireless access. The service authorisations covered
by the unified licence are:

 access service;

 internet service;

 NLD service;

 ILD service;

 global mobile personal communication by satellite service;

 public mobile radio trunking service;

 very small aperture terminal closed user group service;

 Indian national satellite system mobile satellite system reporting service; and

 resale of international private leased circuit service.

The service areas for each of the service authorisations have also been defined. The unified
licence is granted for a period of 20 years from the effective date of the licence. The general,
operating, monitoring, financial and security conditions for each of the service authorisations
have been divided into the general unified licence conditions (applicable irrespective of the
service authorisation) and the specific service authorisation-related conditions (applicable only if
the said authorisation has been granted). Apart from freeing up the spectrum from the licence, the
unified licence also bars cross-holding in different telecommunications companies.

With regard to the official fees, the charging heads have been defined separately under the unified
licence with different limits for entry fees, net worth, paid-up capital, bank guarantees and
processing fees. However, where a licensee is applying for more than one service authorisation,
the unified licence sets out the upper limits for such financial implications. The prescribed upper
limits are also the amounts applicable in cases of the licensee applying for all the services
covered by the unified licence. These have been fixed at 250 million rupees each for the
minimum equity and net worth of the licensee company, 150 million rupees for the entry fees and
100,000 rupees for the application processing charges. For the provision of the services, an
amount of 2.2 billion rupees has been fixed as the performance bank guarantee and 440 million
rupees as the financial bank guarantee. In addition, 8 per cent of the adjusted gross revenue
(AGR) shall be annually charged from the service providers as the licence fee, which includes the
levy for universal service obligations, currently 5 per cent of AGR. However, it should be noted
that the mechanism for computation of AGR has been specified for different service
authorisations.

In addition to the unified licence, the DoT has also prescribed a registration process for
infrastructure provider entities wishing to do business in India. This registration process covers
the providers of telecoms infrastructure such as dark fibre, right of way, duct space and tower.
The financial requirement for the registration includes a small processing fee and does away with
the entry fees and bank guarantee. The infrastructure providers engaging in India would have an
easier entry as they would merely have to register themselves rather than obtaining a licence.

To provide telecoms services in India, the players would require the unified licence and spectrum
would have to be secured separately through the auction process. The auction of the 2G spectrum
and the licences awarded in 2008 were quashed by the Supreme Court of India on the grounds of
unconstitutionality; however, many of these quashed licences have been re-auctioned. Separately,
the auction of 3G and BWA spectrum was held in 2010 and licences were issued. The last auction
was conducted in September-October 2016; it was India’s biggest sale of airwave spectrum. The
total of 2,354.55MHz of spectrum offered for sale divided in seven bands, of a value amounting
to 5.63 trillion rupees. It was the first time that the DoT had auctioned spectrum in the 700MHz
band. However, only 965MHz of spectrum worth 65,789.12 million rupees could be successfully
sold. No bids were made for the 700MHz and 900MHz band. It can be deduced that the Indian
telcos prefer short-range penetration over the long range.

Recognising the potential of Internet of Things (IoT) and Machine to Machine (M2M), emphasis
was laid down in the NTP 2012 as: ‘To facilitate the role of new technologies in furthering public
welfare and enhanced customer choices through affordable access and efficient service delivery.
The emergence of new service formats such as Machine-to-Machine (M2M) communications (eg,
remotely operated irrigation pumps, smart grid, etc) represent tremendous opportunities,
especially as their roll-out becomes more widespread.’
It was also believed that launch of various government programmes such as Digital India, Make
in India and Startup India will help immensely in driving the growth of the M2M/IoT industry in
the country. In addition, many mega projects have been undertaken by the government of India,
which will help in the effective and sustainable utilisation of resources by the application of
M2M/IoT technology.

In May 2015, the DoT published the National Telecom M2M Roadmap after seeking inputs from
certain stakeholders from the industry. The Roadmap focuses on communication aspects of M2M
with the aim to have interoperable standards, policies and regulations suited for Indian conditions
across sectors in the country. In addition, the Telecom Engineering Centre (TEC) of DoT has also
come out with nine technical reports on M2M detailing sector-specific requirements and use
cases to carry out gap analysis and future action plans with possible models of service delivery.

After going through a complete process of consultation with the concerned industry
representatives and analysing various issues involved and also considering the comments
received from stakeholders in their written responses, TRAI issued a set of recommendations on
5 September 2017 on various aspects of M2M services including its regulation under a possible
registration process or appropriate licensing and security concerns. TRAI recommended that
device manufacturers should be mandated to implement Security by Design principles in M2M
device manufacturing so that end-to-end encryption can be achieved, and the government should
provide comprehensive guidelines for manufacturing and importing of M2M devices in India.

However, the above recommendations of TRAI have not been fully completely incorporated in to
respective policies and guidelines. In this regard, DoT issued a set of instructions dated 16 May
2018, for implementing restrictive features for SIMs used only for M2M communication services
and related Know Your Customer (KYC), security and other instructions relating to provisioning
of M2M services in India by the licensed telecom service providers.

What is TRAI?
The Telecom Regulatory Authority of India (TRAI) was set up in order to have a suitable environment for
the growth of the telecommunications industry in the country and be a part of the global information
society. It is a statutory body and regulates the telecommunications sector in the country.

TRAI Structure

 TRAI shall have, in addition to its chairman, at least two full-time members and not more than
two-part members, all appointed by the Central Government.
  The members should have special knowledge of, or professional experience in telecom, industry,
finance, accountancy, law, management and consumer affairs.

 Only those senior or retired Government officers can be appointed as members who have served
for at least three years as secretary/additional secretary to the Union or State Governments.

Kickstart your UPSC 2021 preparation today!

Telecom Disputes Settlement Appellate Tribunal (TDSAT)

 The powers of the TRAI have been considerably diluted by the TRAI (Amendment) Ordinance,
2000. Now the regulation of telecom services is to be done by TRAI and the newly set up
Telecom Disputes Settlement Appellate Tribunal (TDSAT).

 They will also adjudicate disputes, dispose of appeals, protect interests of service providers and
consumers, to promote and ensure orderly growth of the telecom sector.

The composition of TDSAT is also changed to include the chairman and not more than two whole-time
members and not more than two part-time members to be appointed by the Government. The TDSAT has
been given the mandate to adjudicate disputes:-

(i) between a licensor and a licensee;

(ii) between two or more service providers;

(iii) between a service provider and a group of consumers.

The Union Government, State Government, any local authority or any individual can approach the TDSAT
for adjudication on issues related to disputes between parties mentioned above.

The chairperson and members of this tribunal are to be appointed by the Government of India in
consultation with the Chief Justice of India.

Know more about the UPSC 2021 calendar at the linked article.

Powers and Functions of TRAI

The Powers and Functions of TRAI are mainly:

 To recommend the need for and timing of introduction of new service providers and terms and
conditions of the license to a service provider;

 To ensure technical compatibility and inter-connect between different service providers and
regulate their revenue-sharing arrangements;

 To ensure compliance with terms of license and revaluation of the same for non-compliance;

 To lay down and ensure a time period for providing long-distance and local distance circuits;
  To facilitate competition and promote efficiency in operations to promote the growth of telecom
services;

 To protect consumers’ interest, monitor quality of services, inspect equipment used in networks
and make recommendations about such equipment;

 To maintain a register of interconnect agreements and keep it open for inspection and to settle
disputes among the service providers in this respect;

 To give advice to the government on any matter related to the telecom industry. Levy fees and
charges for services and, ensure that universal service obligations are complied with; and

 To perform any such other administration and financial function as may be entrusted to it by the
Central Government.

Land Acquisition and State Policy in India

The quintessential beginning of the story of land acquisition in India as a systematic

process carried out under the sanction of a formal state structure is the colonial Land
Acquisition Act of 1894 (hereon LAA 1984), a colonial law brought into practice by
the then British government. While the systematic dispossession of peoples from their
lands has a longer history in colonial India, and even continued outside of the ambit of
this law, in this article I trace the evolution of the institutionalization of land
acquisition as a legitimate state concern and its links with questions of development.

This law, in its inception, lays out certain key principles in the process of land
acquisition that continue to form the foundation of state policy and institutional
mechanisms in place for the acquisition of land into the present-day scenario. First and
foremost, it establishes and foregrounds the principle of eminent domain, a principle
that grants the state, in the last instance, right to all property under its domain. This
right underlies the authority of the state to acquire any individual’s private property
for the ‘general good’ of its population or what has been termed ‘public purpose’.
While the law has undergone several changes only in the last three to four years, this
fundamental principle of eminent domain that is closely related to the notion of
‘public purpose’ as defined by the state remains firmly in place.

Land Acquisition Act 1894

The colonial law of 1894 continued to be in use as the principal law used for purposes
of land acquisition for ‘development’ projects, a term that has been interpreted as
widely as ever over the course of time, until as recently as 2013. Before moving on to
examining the changes introduced in the law more recently, a close examination of the
LAA 1894 is key to understanding the legal and institutional framework employed by
the state in matters of land, displacement and development. Principally, the phrase
‘public purpose’ has been elaborated in the LAA 1894 under Section 3(f) as including
the need for sites of planned development, extension or establishment of new villages,
town planning, pursuing a government scheme or policy, housing for the poor and/or
people affected by natural calamities, building of public or government offices, and
for any other development scheme or plan, including construction of railways,
irrigation canals, etc. The Act further includes companies, and therefore private
capital, within its ambit, so long as prior consent of the government has been acquired,
and it is ‘likely to prove useful to the public’ (Section 40(b)).

Section 5A of the Act makes provisions for objections that may be registered with
concerned state authorities within thirty days of publication of the notification.
However, this section is overruled by an urgency clause, the exact definition of what
constitutes an ‘urgency’ remaining ambiguous. Under the urgency clause, there is
little space for dissent and objections. On the resolution of such objections, a
declaration of the proposed project is put forward by state authorities, serving as
evidence that the land required is for a ‘public purpose’. With this the process of
acquisition is set into motion and the matter of compensation and identification of
persons who are to be compensated begins.
There are provisions within the law to deal with individuals who may oppose the said
land acquisition and prove to be an obstacle in such a process, mandating government
officials, assisted by state police forces to ‘enforce’ the surrender of such land
(Section 47). The law, therefore, institutes and sanctifies the absolute authority of the
state in forcibly acquiring land, codified in phrases such as ‘compulsory nature of
acquisition’ and ‘enforced surrender’ of land.

Land Acquisition Act (Amendment) Bill 2009 and Resettlement & Rehabilitation
Bill 2009

Following sustained criticism of the LAA 1894, most significantly from people’s
movements protesting forced land acquisition, but also evident from several court
rulings recognizing the undemocratic character of this Act [1], in 2006 the National
Advisory Council (NAC) drafted a National Development, Displacement and
Rehabilitation Policy. This document drew heavily on a draft presented by the
National Alliance of People’s Movements (NAPM). NAPM is an umbrella
organization of several people’s movements organizing around questions of land and
livelihood, and its draft to the NAC followed a series of consultations with its various
constituencies.

In 2009, the LAA (Amendment) Bill and R&R Bill were introduced in Parliament but
were not passed owing to opposition, both within and outside the Parliament.
However, several key changes were proposed in the law under the LAA (Amendment)
Bill 2009. It broadened the category of persons who could claim compensation,
including tenants who worked the agricultural land in question, as well as Scheduled
Tribes and other traditional forest dwellers whose traditional rights over forest lands
may have been lost (now recognized under the Scheduled Tribes and Other
Traditional Forests Dwellers (Protection of Forest Rights) Act 2006). This was an
important change, attempting to recognize not only those who had proprietary rights
over the land, but also those whose livelihood practices were to be affected.
The phrase ‘public purpose’ that continues to remain a controversial phrase and one
that is at the heart of much debate even now, came to be elaborated in greater detail
under the proposed amendment. This included a range of activities from military and
defense purposes, to infrastructure and industrial projects including activities such as
mining. It introduced the centrality of rehabilitation and resettlement, and not mere
monetary compensation, as integral to the responsibility of the state. This included
responsibility for developing the infrastructure of rehabilitation sites including
assuring proper health and education. Where the number affected is greater than 400
families in the plains and 200 families in the hills, the LAA (Amendment) Bill
introduced the requirement of a Social Impact Assessment report, keeping in mind the
impact on marginalized communities in particular.

The proposed amendment further brought to the fore the need to desist from acquiring
irrigated multi-crop agricultural land and made a provision to follow the principle of
minimum displacement, minimum disturbance to infrastructure and ecology. The
period for presenting objections was increased to 60 days and a time frame was put in
place to complete the process of disbursement of compensation and provision of
rehabilitation and resettlement. There was an increase in the compensation for land,
taking into account an increase in the value of the land once put to its proposed use,
and a restriction in state intervention for acquisition of land for companies to thirty per
cent of the land (where seventy per cent of the land would have to be acquired by the
company itself through purchase in the market). In order to settle disputes regarding
land acquisition it proposed a Land Acquisition Compensation Disputes Settlement
Authority to adjudicate all such disputes within six months.

The Relief and Rehabilitation Bill 2009 mandated the procedures for determining
eligibility and benefits for affected individuals and put in place authorities and bodies
to oversee the process. However, it did not make compulsory the resettlement of
affected people, but instead merely mandated the procedure. Its mechanism of
grievance redressal was problematic in granting authority likened to that of a court to
authorities outside of the judiciary.
The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act 2013

In 2011, on recommendations of NAC to combine the two Bills, a comprehensive

Land Acquisition, Rehabilitation and Resettlement Bill was introduced in the
Parliament to replace the existing Land Acquisition Act 1894 and bring the process of
land acquisition and subsequent rehabilitation of the affected population into the ambit
of one single law.

Certain key new elements introduced in this Bill included the increase in
compensation values to four times the market price of land in rural areas, and two
times the market value in urban areas. While it limited the acquisition of land for
public purposes only, it included private companies as well as public-private
partnership projects within the ambit of the law, requiring the consent of 80 per cent
of displaced people in this case. Consent was to be sought through gram sabhas, or
village assemblies, as per existing Panchayati Raj institutions and laws, including
PESA [2]. Social Impact Assessment was to be conducted in the case of all land
acquisition. However, the law would not apply in the case of acquisition under 16
existing laws including the Special Economic Zone Act 2005, the Atomic Energy Act
1962 and other similar Acts [3]. This Bill was a far more comprehensive Bill taking
into account several of the key demands of displaced and affected populations (and
not merely landowners) by making the state as well as private companies responsible
for R&R with proper infrastructure and basic services in place for the to be affected
population.

Despite significant new features in this Bill, it continued to have certain problems,
including the manner in which ‘public purpose’ remains a fluid category allowing any
kind of private industry to flourish in its name, consent in the case of public projects is
not required, no R&R provisions are mandatory in the case of temporary acquisition
of land (for up to three years). However, it was a move ahead in establishing certain
structures in place such that the interests of to-be affected populations are taken into
consideration to a large extent.
The law that was finally passed in 2013 came to be known as the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act 2013 (RFCTLARR 2013). However, what was passed finally was a
somewhat watered-down version of the LARR Bill 2011. It created exceptions for a
range of acquisitions for which an SIA and informed consent was not required,
including projects in mining, railways, electricity, and national highways, amongst
others. At present it is this law that governs the realm of land acquisition for the
purpose of development projects.

Land Acquisition | Highlights of the 2013 Bill (same as above but in bullets)
The Bill provides for land acquisition as well as rehabilitation and resettlement. It replaces the Land
Acquisition Act, 1894.

 The process for land acquisition involves a social impact assessment survey (SIA), preliminary
notification stating the intent for acquisition, a declaration of acquisition, and compensation to
be handed over within a certain time. All acquisitions require rehabilitation and resettlement to
be provided to the people affected by the acquisition.
 A Land Acquisition and Rehabilitation and Resettlement Authority shall be established for
settling any disputes relating to the process of acquisition, compensation, and R&R (Box 1).
 There shall be no change of ownership of acquired land without prior permission from the
government. Land may not be used for any purpose other than for which it is acquired.
 The government may temporarily occupy and use any piece of waste or arable land for a
public purpose. This occupation may be for a period of not more than three years.
 Compensation for the owners of the acquired land shall be four times the market value in case
of rural areas and twice in case of urban areas. The compensation for the land acquired shall be
based on the (a) the minimum land value, specified in the Indian Stamp Act, 1899 for the
registration of sale deeds; and (b) the average sale price of the higher priced 50 per cent of all
sale deeds registered in the previous 3 years for similar type of land situated in the vicinity.
The value of the assets (trees, plants, buildings etc.) attached to the land being acquired will be
added to this amount.
 In case of acquisition of land for use by private companies or public private partnerships
(PPP), ‘consent’ of 80 per cent of the displaced people is required. Purchase of large pieces of
land by private companies will require provision of rehabilitation and resettlement.
 The provisions of this Bill shall not apply to acquisitions under 16 existing legislations
including the Special Economic Zones Act, 2005, the Atomic Energy Act, 1962, the Railways
Act, 1989, etc.
  The provisions of the Bill relating to land acquisition, rehabilitation and resettlement is
applicable in cases when the appropriate government acquires land, (a) for its own use and
control, (b) to transfer it for the use of private companies for public purpose, and (c) on the
request of private companies for immediate use for public purpose.
 The Bill proposes that private companies shall provide for rehabilitation and resettlement if
they purchase or acquire land, through private negotiations, equal to or more than 100 acres in
rural areas and 50 acres in urban areas.
 The term ‘public purpose’ in the Bill includes provision of land for, (a) strategic defence
purposes and national security, (b) roads, railways, highways, and ports, built by government
and public sector enterprises (c) project affected people, (d) planned development or
improvement of villages, and (e) residential purposes for the poor and landless. Public purpose
includes other government projects which benefit the public as well as provision of public
goods and services by private companies or public private partnerships; these require the
consent of 80 per cent of project affected people. Affected families include those whose
livelihood may be affected due to the acquisition, and includes landless labourers and artisans.
 A maximum of five per cent of irrigated multi-cropped land may be acquired in a district, with
certain conditions.
 Every acquisition requires a SIA by an independent body followed by a preliminary
notification and a final award by the district collector.
 In the case of urgency, the Bill proposes that the appropriate government shall acquire the land
after 30 days from the date of the issue of the notification (without SIA). This clause may be
used only for defence, national security, and conditions arising out of a national calamity.
 The Bill proposes the following authorities; administrator; commissioner for rehabilitation and
resettlement; rehabilitation and resettlement committee (for acquisition of 100 acres or more of
land); national monitoring committee for rehabilitation and resettlement; and land acquisition,
rehabilitation and resettlement authority.
 If an acquired land which is transferred to a person for a consideration, is left unutilised for a
period of 10 years from the date acquired, it shall be returned to the land bank or the
appropriate government.
 In cases where the ownership of an acquired land is sold to any person, without any
development made, 20 per cent of the profit made shall be shared among the persons from
whom the land was acquired.

Issues and Challenges to Urban Infrastructure in India

It has been observed that the growth of urban infrastructure does not match with the growth
of urban population. Some striking facts about the challenges of urban infrastructure are as
follows:
  Status of drinking water supply, public transportation, sewage and solid waste management is
much lower than desired.

 No city has fully covered 24×7 water supplies.

 Only 74% of the house-holds are served by piped water.

 Only 65 of 423 class I cities have a formal city bus service in 2012.

 Only 30% cities have sewage treatment as against desired 100%.

 7% urban population has access to the piper sewer system.

 6% urban population still defecates in the open.

 Only 72% of the solid waste is collected and only 30% is segregated. Scientific treatment and
disposal is non-existent.

 24% urban population lives in slums.

Major Infrastructure Bottlenecks in India/Suggestions and Way Forward

Major Infrastructure Bottlenecks in India
There are various bottlenecks which act as impediments for growth of infrastructure. The
major ones are summed up below:
Financing
Infrastructure projects are highly capital intensive and funding is considered as a major
impediment in achieving the infrastructure goals. The infrastructure broadly can be divided
into two types, one which is very essential for the public at large and have no or very little
revenue potential and other which has handsome revenue potential. The first kind of
infrastructure must be totally government financed whereas the later can be developed on
PPP mode. Since resource constraints will continue to limit public investment in
infrastructure, PPP-based development needs to be encouraged wherever feasible.
Land Acquisition
Another significant challenge in achieving the infrastructure goal is the way land acquisition
is done for infrastructure projects. Compensation fixed in terms of registered value is always
the bone of contention. There is always a substantial difference between the compensation
offered and the actual value of the land. The land owners always feel aggrieved which results
in dispute and litigation.
However, The Land Acquisition and Rehabilitation & Resettlement Bill would be able to
tackle this issue of land acquisition favourably.
Clearances from numerous agencies
Most of the infrastructure projects in India suffer from delays in completion. This is mainly
due to an inadequate regulatory framework and inefficiency in the approval process.
Infrastructure projects require multiple sequential clearances at various levels of government.
There are various approvals needed at every stage which definitely delay the infrastructure
projects.
Environmental Impact Assessment (EIA)
Environmental safeguards and guidelines have proven to be one of the major reasons for
delay in infrastructure projects, especially in the power sector. While new projects need to
comply with these regulations, even a project under construction may need to comply with
revised standards midway through the execution stage.
Poor pre-construction planning
Due to the already adverse effect of various impediments like land acquisition, statutory
approvals, delayed financial closure, etc. the pre-construction phase of infrastructure projects
is pretty long. Therefore, there is delayed commissioning and completion of projects.
Suggestions and Way Forward
It must be noted that India’s Infrastructure which is an essential and most important
component of Urban Development, is in a poor shape and needs an immediate attention and
redress both from Government and Industry. Following are some of the ways to surpass the
challenges faced by infrastructure development:
 There must be a more conducive environment for potential concessionaire. There is always a
worry of early clearances and investors are stuck in the bureaucratic cycle.

 There is a necessity for improvements in the investment climate.

 Migration of large population to urban centres is causing new cities to emerge and existing
ones to expand. This is causing rapid urbanization. Therefore, India needs to develop satellite
cities for which the need is of mass-transport systems.

 There must be Single window statutory clearance which even includes Environmental
clearance to projects.

 There are good competent people working in different departments of government, however
they are working in silos, we need better and effective coordination for a fast project roll out.
There is no doubt that fiscal support is the dominant factor for infrastructure development but
equally important is enabling policies from the governments end. Then only the world class
infrastructure dream of India can be realized and place India’s economy on a high growth
trajectory.