Advocating private investment in infrastructure development, the Economic Survey on Friday asked the government to limit its role in infrastructure services saying it runs risk of technical inefficiencies and political influence.
The pre-Budget report card of economy decried the rate of investment in infrastructure saying it was not only far lower than China and East Asia but also lower than the Tenth Plan target.
Economic Survey 2004-05: Complete Coverage
"Direct government production of infrastructure services introduces difficulties concerning technical efficiency, adequate scale of investment, proper enforcement of user charges, and competitive market structure," the Survey, tabled in Parliament on Friday, said.
Six core industries (electricity, coal, finished steel, cement, crude oil and petroleum products), with important forward linkages with the rest of the economy, registered a lower average growth of 5.4 per cent during April-December 2004 compared to 5.8 per cent in the same period in 2003.
The decline was on account of a sharp fall in the growth of finished steel, it said. Among the other infrastructure sectors, goods traffic on railways (7.7 per cent), cargo handled at major sea ports (11.1 per cent) and airports (18.3 per cent), and air passenger traffic (21.8 per cent) experienced higher growth rates in April-December 2004 as compared to the same period in 2003.
Improvements in infrastructure will have a strong impact upon GDP growth and poverty alleviation.
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