Maharashtra Government – Infrastructure Pace Vs. GDP Growth

By Mahesh Mudda

Early in 2007 India joined the select ranks of 12 countries to have a Trillion Dollar GDP (in nominal terms). Predictions by various expert groups indicate that for the next two decades GDP growth in real terms would be in the region of 6 to 9 % on compounded basis. This means that by 2025 the size of Indian Economy would range between 3 to 5 Trillion US Dollars. By that time India’s population would grow to 1.4 billion. More than 67% of this population would be in the productive working age which will be the main driving force of this economy. That means unlike other countries India will be a young country where more than 42% of its population would be below 25. Expert groups also predict that average household disposable income to triple by 2025 registering a higher growth rate that was achieved in last 20 years. India’s middle class would grow to 583 million people which means approx. 41% of its population would be middle class – a class that has triggered this phenomenal growth trajectory.

All these projections will remain merely a dream if infrastructure development does not keep pace with growing economy.

Let us see how Maharashtra State fares with this national scenario:

Gross State Domestic Product is expected to keep pace with the national average and would grow in real terms between 6 – 9 % in the near future i.e. upto 2013.
GSDP at current prices works out to approx. 12% (Rs. 5 Lakh Crore) of National GDP (Approx Rs.38 Lakh Crore) at current prices.
Till July 2007 almost 14000 new industrial projects with a total investment of Approx. Rs. 4 Lakh Crores have been committed to the state thus generating approx. 25 lakh additional jobs.
GOM has approved till July 2007 approx. 4000 projects under FDI with a expected investment of about Rs.70,000 crore.
Population of Maharashtra is expected to be around 11 crores and is increasing at an average of approx. 10% per decade.

This comparison with the national data throws up many interesting challenges for Maharashtra in terms of infrastructure development when one compares the following facts with the All India figures.

9.2 % (5902 kms) of the rail network passes through Maharashtra state.
More than 10% (720 kms) of total coastline is in Maharashtra.
Maharashtra has more than 9% (3.08 L Sq. Kms) of All India’s geographical area.
10% ( 10.80 crores) of the national population resides in Maharashtra.
It has roughly 18% (130 lakhs) of national vehicle population.
It has roughly 8% (2.34 L Km) of national road network.
It has approximately 9% (279 Lakhs) of national cell phone connections of which 115 Lakhs are in Mumbai alone.
Maharashtra alone contributes 18% of the total I.Tax collection and about 30% of the total direct taxes collection.

Infrastructure development in Maharashtra has very close bearing to infrastructure development in Mumbai when we are aiming for world class facilities for Mumbai and are dreaming of making Mumbai an International Financial centre.

We will see where Maharashtra stands in relation to following infrastructure criteria which has propelled India and especially Maharashtra to its present glory and what needs to be done to sustain this momentum in years to come.

Roads and bridges.
Seaports and Airports
Dams, Canals, Waterways, Water Distribution
Sewage, Drainage and waste disposal
Mass Public Transportation
Power Generation, Transportation and Distribution.
Special Economic Zones, Industrial Complexes and IT parks
Telecommunication – Capacity Augmentation, Network Development and Distribution.
Infrastructure related to sports and entertainment.

If Maharashtra’s share of 10% or more in the national GDP parameter is to be maintained for the next two decades then the rate to improve these infrastructure parameters has to be greater than the national average.

Motto for next two decades should be

10% is OK but 15% will be better.

Water Resources

Water is a natural resource and like all natural resources it is scarce. However, what is effectively available for consumption and other uses is a small proportion of the quantity available in rivers, lakes and ground water. The rest is available in lakes, rivers, atmosphere, moisture, soil and vegetation. About 2.7 per cent of the total water available on the earth is fresh water of which about 75.2 per cent lies frozen in polar regions and another 22.6 per cent is present as ground water. Luckily India is endowed with good natural resources in the form of lakes and rivers. Rains cover most parts of India. Human intervention is required for its storage, transportation (to areas devoid of adequate rain water) and distribution to the points of consumption either for household, for industry, for agriculture or for power generation.

World oceans cover about three fourth of earth’s surface. According to the UN estimates, the total amount of water on earth is about 1400 million cubic kilometres which is enough to cover the earth with a layer of 3000 metres depth. However the fresh water constitutes a very small proportion of this enormous quantity. The crisis about water resources development and management thus arises because most of the water is not available for use and secondly it is characterized by its highly uneven spatial distribution. Thus its economical use, effective management and new methods of storage, transportation and distribution assumes greater importance for our country as well as Maharashtra.

Maharashtra is fortunate to have the heighest number of dams (1427) in the country. Since rainfall in the state is confined to only 3-4 months a year, it means that storage in these months has to be sufficient for the yearly water requirements. Actually the storage has to take care for an additional year since there are many draught prone areas in the state. How do we make Maharashtra Sujalam in true sense?

Build an extensive network of canals.
Employ adequate measures to reduce evaporation of water from reservoirs.
Take major initiative for increasing the water table.
Stop leakages in the distribution system.
Take giant steps to increase forest cover in State.
Involve citizens and corporate in the save water drive.
Implement ‘Nagpuri Weir’ pattern every across the state.
Make tree plantation compulsory for citizen and corporate body.
Make rain harvesting compulsory for every new housing project in the state.
Make intentional or unintentional wastage of water a cognisable offence.

If all these initiatives result in even 5% saving in usage / increase in storage it will be a great achievement.

Ensuring adequate rain fall is not in our hands, but conserving and saving available water definitely is. Let us do it. Let every citizen and corporate make a pledge to make Maharashtra a Water Positive State.

Roadways – Life Line to Prosperity

Maharashtra has about 2.34 L Km of road network which is maintained by PWD. This includes national highways passing through Maharashtra, State Highways connecting cities, towns and district places of the state and village roads built through Pradhanmantri Gram Sadak Yojna but maintained by PWD. Around 130 L vehicles which are registered in Maharashtra use these roads and probably equal number of vehicles not registered in Maharashtra use it for reaching various destinations outside Maharashtra.

Effective road network improves the economy of the region substantially was never better demonstrated by completion of Mumbai Pune Expressway. Suddenly Pune which was an industrial city and an important education hub was transformed into an IT destination comparable to Bangalore and Hyderabad. We are sure after completion of 4 laning between Mumbai and Nashik in 2009-10, Nashik will also witness similar phenomenon.

With Better connectivity between Pune and Kolhapur (4 laning already completed) this already prosperous town will start attracting fresh talent, investment and culture from adjoining Karnataka state.

So what initiative should be taken to give all major towns of Maharashtra better and improved connectivity.

Policy decision that all towns and cities on a fixed matrix of human population, vehicle population, industry density and employment generation potential to have a minimum specified road network – e.g. 4 laning.
Industry participation in maintenance of road network in return for advertising rights for a minimum specified duration.
Incentive for setting up industry in these pockets.
Good road network to become drivers of growth.
Concept of guardian minister for every major arterial roads in state.
Every major road in state to be a profit centre.
Annual state award for best maintained road in terms of surface and build quality, facilities for motorists and pedestrians and tree cover.
Grading of road construction and maintenance contractor.

If SGDP growth is required to be maintained in relation to national GDP then the existing ratio of state road network to national road network will not only have to be maintained but also improved during the current plan period. Extensive and well maintained road network has done wonders to Gujarat Economy. There is no reason why it will not strengthen pre eminent position of Maharashtra in the national economy.

Power Generation

What good it is if you have the industry but does not have enough power to rotate the wheels of this industry?

GOI’s motto of Power For All by 2012 is achieved by Maharashtra already to a large extent. The only problem is that cities, towns and villages are electrified but there is no electricity for large parts of the day or in some cases for days together.

Maharashtra has about 13.5% (19944 MW) of the national installed capacity for power generation across all types of power generation and about 20% (852 MW) of the national capacity as regards Nuclear Power. Hopefully with a new agreement with US on Nuclear cooperation this ratio should improve.

Tremendous growth in industry in last 15 years , substantial increase in consumption patterns and no major increases in capacity generation has resulted in Maharashtra becoming a power deficit state from Power Surplus state it was just 10 years back. With State suffering from a peak deficit of more than 5000 MW, the situation has now becoming alarming.

Is there a solution in sight? Yes. Can a common man contribute in reducing this deficit? Of course yes. Will we ever regain our position of a decade back? 100%

So, how do we go about it?

Encourage private generation like Reliance and Tatas and incentivise heavily generation for captive consumption.
Harness wind energy in a big way. Introduce mini wind turbines for installation on high rise building to cover power requirements of common utilities.
Initiate public awareness campaign towards energy saving devices.
Reduce transmission and distribution losses.
Make solar power for water heating compulsory in residential buildings. Incentivise builders with extra FSI for doing this.
Make necessary changes in DC rules to employ energy saving building materials (sandwich walls) and use of natural sunlight in the architectural design.
Employ billing system of sliding scale based on consumption, for all distribution companies.

Many other methodologies can be suggested, however all these measures are going to be at the consumption end and the demand is only going to increase in the years to come. So, augmentation of generating capacity to meet and surpass the peak demand and sell of excess electricity to other states at a premium to recover installation costs is the only real solution.

Sea ports and Airports

Terminology of Living on Wings (and prayer) became true in case of India when the nation opened its skies to private operators. The result is there for everyone to see. In the last 5 years the number of passengers and cargo handling capacity has more than tripled. Just Mumbai and Delhi alone handle more than 1500 landings and take off per day.

Though the air traffic has increased more than three times in last 5 years – the capacity in terms of number of airports has not seen such increase. May be the traffic is concentrated in only certain sectors. Number of airports in the country by the end of 2007-08 were 117 of which 37 were non functional – i.e. not used for commercial purposes.

Maharashtra has only 4 functional airports i.e. having scheduled commercial flights – Mumbai, Pune, Aurangabad and Nagpur. So in terms of this parameter Maharashtra has only 5% share of the national airports tally. Other airports with air strips are not large enough to handle passenger traffic of scheduled air lines or just does not have adequate passenger load factor to make operations viable. However, it has been noticed that functional airport attracts domestic as well as foreign investment in that region thus improving its employment generation as well as its economic prosperity, so it is a case of chicken and egg.

India never concentrated on its sea ports and therefore lagged in its foreign trade compared to other tiny nations like Hong Kong and Singapore which have surpassed India in terms of freight traffic. It will be surprising to note that India with a Coastal Line of 7000 kms has only 11 major sea ports out of a total 38.

Compared to this Maharashtra has only 2 major sea ports – Mumbai and JNPT.

This is what Maharashtra needs to do to acquire a bigger pie in India’s growing passenger and goods traffic – domestic and international.

Out of 27 medium and minor sea ports – develop at least two – into full fledged major ports on the lines of JNPT specialising in handling of bulk cargo.
Encourage freight handlers and incentivise use of new ports through competitive / concessional port charges.
Encourage passenger traffic to and from Mumbai from these ports to reduce road traffic congestion.
Activate at least two non functional airports to give boost to these cities and improve commerce in the neighbouring areas – Kolhapur and Nashik appear to be most suited for handling commercial traffic.
Link all ports with consumption centres through dedicated corridors separately for passengers and traffic.

Sewage and Drainage

Effective sewage and drainage facility determines the health and hygiene of the city. Though it is the function of the local administrative body, the infrastructure entails huge funds and the assistance is normally provided by State / Central government.

Solid Waste management in Big cities like Mumbai is also equally important as management of sewage and drainage. If sewage and drainage determines the health and hygiene of the city, effective solid waste management determines the beauty of the city.

MCGM through its 983 strong fleet of owned and hired vehicles, from 1400 daily trips, through 30000 strong dedicated staff, manages approx. 6500 tons of garbage created by its population of 12 million people. It involves a staggering expenditure of Rs.1050 crores ( of which almost Rs.800 crores is on account of revenue expenses). In many respect this is the annual budget outlay of many small local bodies.

Despite these initiatives, we still find filth and garbage in every nook and corner of the city. What can we do to make our Mumbai Healthy, Hygienic and Beautiful ?

Use standardized community bins for waste storage.
Segregate dry and wet waste.
Incentivise deployment of kitchen incinerators in all stand alone buildings having more than 7 floors.
Use solid waste as a food for vermi culture.
Stop discharge of sewage and drainage in open nullahs.
No building completion certificate be given if drainage is not connected to municipal sewer.
Involve NGOs in management of solid waste management.
Reward best kept wards with additional incentives like better pavements, nominal reduction in property taxes, reduced water charges etc.

These initiatives / reforms will definitely help achieve our dream of making Mumbai into a city comparable to Shanghai.

Telecommunications

Remember the days when for talking long distance say to Delhi, you would book a trunk call, keep waiting for hours near the telephone for that trunk call to materialise and when it actually came thro, literally shout since the voice would be so feeble and with so much disturbance. If you could talk within the first three times all that you wanted to convey you could consider yourself fortunate.

All this seems like a bad dream now. Modern generation has not even heard about trunk call system which existed. Mr. Rajiv Gandhi realised that for taking India into 21st century, effective communication is a must and appointed Mr. Sam Pitroda for revolutionising Telecommunication, and in just a matter of few years, India was galloping on Information superhighway and became one of the foremost countries in IT and communication. Telecommunication proved to be a true growth driver for the IT industry – and how.

From a regime which had Telephone waiting period in excess three to five years, we now have the situation that you get the connection on the same day. From a regime where there was waiting for hours for long distance telephone call to a regime where you dial any part of the world from the comforts of your home / office or from those innumerable STD / ISD booth in every nook and corner of the nation. From a regime which saw tariff of Rs.16 / per minute ( even for incoming calls ) for mobile communication to a regime where the rates are as low as 80 paise/minute and incoming calls have long been declared free.

From fixed telephony we have quickly migrated towards wire less telephony. India recently surpassed US in terms of mobile connections and is presently second only to China in terms of Mobile connections. We are now talking about 3G services in mobile which will propel India to even higher levels of IT prowess.

If India’s performance in Telecommunications is to be described in one word, it will be ‘Spectacular.’

How do we further improve this terrific performance?

Unified tariff across all India and across all carriers.
Make local calls free on all networks – fixed as well as wireless.
Introduce services like IP TV, Internet as standards with all fixed telephony.
Remove Telephone bills from the service tax net.
Become the hardware provider for switches to other developing countries.

We salute the achievements of our nation in this field and hope the performance in this sector is emulated by all other infrastructure sectors. When this happens no nation can halt the march of India to being a superpower just like what US is today.

Entertainment

Entrainment of yesteryears and entertainment of today – there is vast difference in terms of content, storage, display and retrieval.

Modern entertainment is through digital media encompassing means of diverse applications – be it personal entertainment, home entertainment or public entertainment.

Theatres, multiplexes and auditoriums have undergone a sea change from what it was just a few years back. We never had a situation that of a theatre complex exhibiting more than 3 or 4 shows a day. Now we have a situation of theatre complexes exhibiting more than 24 shows per day through multiscreens and flexi timing.

Recent advances in digital technology like I MAX and digital surround sound is pushing the boundaries of these entertainment sector.

For a common man this means various means of entertainment avenues. However, India and Maharashtra is lacking in being at the forefront of this digital explosion.

What can we do to change this situation?

Like diamond bourse in BKC develop a digital processing hub in Mumbai , Pune and Kolhapur.
Incentivise the importers to bring in latest equipment for pre and post production.
Give tax holidays for future complexes like film city in Goregaon.
Introduce film production and other related subjects like editing, direction and cinematography and others through technical education boardslike ITI.
Create more film institutes on the lines of one in Pune.
Bring in stringent legislation to curb piracy.

We do not just want to be number one in terms of number of movies that we produce per year but we should also aim for being number one in terms of quality of the movies and entertainment programs that we produce as regards to technology. Our aim is to win an oscar in every department of post production.





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