India Insight

(Any opinions expressed here are those of the author and not necessarily of Reuters)

Much of it a relic from before the 1991 economic reforms that kick-started the India growth story, the country’s infrastructure is screaming out for more investment to fix pot-holed roads, modernise the railway network and build more power plants. But unable to match the spending power that the likes of China have, the Indian government has turned to the private sector to fund much of the new infrastructure it needs. Indian politicians must therefore strike a balance between allowing the private sector to make money, while at the same time protecting the interests of customers (and voters) in a country where hundreds of millions live below the poverty line.

Is it better to have state-run, pot-holed roads, or have swish six-line highways that charge a toll that becomes unaffordable to some? What’s more, to what extent should the government go to protect infrastructure firms – vying with one another for project bids – when such projects run into trouble?

At the start of April, Adani was granted permission by the federal power regulator to allow it to charge “compensatory” tariffs to existing customers in Gujarat and Haryana, after a spike in the price of Indonesian coal caused it to incur heavy losses. Tata Power won a similar ruling two weeks later. Adani has already seen the ruling challenged by the Haryana state, which argues that Adani should stick to its original agreement. That has sparked fears that the ruling – a potential game-changer for the sector that has been battered by fuel shortages and distribution losses – could get bogged down in legal battles.

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If you live in one of India’s big cities, you share the road with water tankers. They thunder down the streets, delivering water to houses and apartment complexes, often spilling through some invisible leak. Tucked away on side streets, locals throng them with buckets. Tankers are part of an economic ecosystem that are inseparable from a country whose cities teem with millions of people, but whose public utility companies often don’t have enough water to go around.

Bangalore, India’s “BPO” and information technology capital, is full of them because of the city’s population growth in the past 25 years – 1.5 million people in 1971, 9.5 million in 2011, according to census data.

The ‘Pensioner’s Paradise’ cannot satisfy the demand for water. Nor can it always handle routine problems and maintenance. A recent decision by the Bangalore Water Supply and Sewerage Board (BWSSB) to do some major work on the pumps at the Cauvery river, which delivers much of the water supply from nearly 100 kilometres away, shut down service to large parts of the city for two days.

The Indian government is belatedly waking up to the fact it needs to build new cities and industrial hubs in order to sustain the growth that is supposed to propel the country to super economy status in the 21st century.

But it might be a case of too much, too late as India sets out to build 24 new, industrial cities along a planned dedicated freight corridor from the political capital, New Delhi, to the financial capital, Mumbai priced at a cool $90 billion. Costs aside, it’s a big ask in a country known for its mulish bureaucracy and maddening red-tape, its violent protests over land, and endemic corruption. Even building a bridge (like the Mumbai Sea Link) or highways (like the Golden Quadrilateral) in India can be a struggle.

Dholera, Gujarat: spot of a future Indian city

But a handful of Indian civil servants tasked with making the SimCity dream a reality seem determined to chart a path through the obstacle course of Indian development projects.

Amitabh Kant is a man thinking big things about India’s future.

Working from his New Delhi office, tucked away on the third floor of a government-run luxury hotel, he heads what may be the country’s most ambitious ever infrastructure project: building 24 cities from scratch along a 1483-km railway line.

“The vision is to create a manufacturing and trading hub with world class infrastructure,” he told Reuters.

Such an exercise is fiendishly difficult in a country as famous for its bureaucratic red tape, corruption and bloody land acquisition battles as it is for its stellar economic performance over the past decade.

For an Indian man, the entire country is one easy-access urinal. Be it mustard fields, the national highway or the Himalayan foothills — unzipping, unleashing and relieving comes naturally to them. Indian women, unfortunately, do not enjoy the same privilege. For them, infinite patience is a survival skill and a big bladder a necessity.

Bollywood actor Shah Rukh Khan seems to empathise with the pain of the Indian woman. He wants to “dedicate” his life to building public utilities for women across India. “I want dignity and respect to be brought to women,” he said at an event in Mumbai.

It is a shame that the government has still not woken up to this disparity in India’s infrastructure. Be it urban areas or villages, clean public toilets for women remain an alien concept in India.

It was with a heavy dose of cynicism I went to see Lavasa, one of India’s few attempts at building a brand new city, which has ambitions of being an IT and learning hub, as well as a tourist destination.

For a while, media outlets gushed with praise that bore a suspicious resemblance to Lavasa’s own marketing material. Then came stories which questioned Lavasa’s land acquisition and ecological proclamations. So when I drove through the hills outside of Mumbai to check out the place myself, as the quoted travel time of three hours turned to five, I was girded for disappointment.

Yet, I confess, I liked Lavasa.

Not because its lake was beautiful (it was an uninviting shade of orangey-brown), or its hotels were charming (common corporate fare) or because its views were breathtaking (they were nice, but only one trail exists from which to see them) but I liked Lavasa because of its work-in-progress ambition to get all that right and offer affluent, but not filthy rich, India something very fine: modern amenities and working infrastructure, brightly-coloured buildings of style and flare, attempts at being eco-friendly and above all, the one thing that is missing in too many dog-eat-dog/developer-eat-developer urban areas of India — planning.

Even as India Inc celebrates U.S. President Barack Obama’s recognition of the country as a world super power, a recent study by the World Bank presents a contrasting view.

India ranks 134 among 183 nations in a survey called “Doing Business 2011″  — that gauges the ease of doing business in a country — and is ranked behind countries like arch rival Pakistan, Bangladesh and Sri Lanka.

Singapore leads the pack, while Hong Kong grabs the second position in the list.

On Monday, we kick-off the 2010 India Investment Summit. We'll have exclusive interviews in Mumbai and Bangalore. In 2006 we held the first Reuters India Investment Summit. It was my first time in India. I've had the privilege to return every year. How time flies. Here we are four years later. Some of the key players may have changed but the big, over-arching theme is still the same: Infrastructure. It's the key to realizing the country's potential but bureaucracy, tough financing and hesitant overseas investment have slowed development in the sector, calling into question the future of India as a powerhouse.

India has had only mixed success in its efforts to accelerate construction of roads, bridges and power plants. The statistics are mind-blowing...the country is growing at 8.5% and has a population of 1.2 billion that is making a mad-dash from the countryside to sprawling cities. Call them growing pains...in India's expanding cities there is an acute need to speed project approvals, implement new financing models and attract overseas investment for much needed infrastructure. But, while the business opportunity is tremendous investors looking to India as a way to play the emerging markets are wary given the history of missed deadlines and red tape that makes getting projects completed a challenge.

Is red tape getting better or worse? Which sectors are attracting most interest? How do returns compare with similar projects globally? How do sector companies attract foreign investment in large projects? Are the challenges forcing investors and developers to look overseas instead?

It has been a rather uneasy transition for Bangalore from “pensioner’s paradise” or “garden city” to the information technology capital of India.

Longtime residents often complain of immigrants from other parts of the country ruining their paradise. Such complaints have been common in Mumbai, which has witnessed waves of immigration since the 1950s, but Bangalore old-timers tend to blame the city’s problems on the “IT fellows”.

It’s fair to say the city’s infrastructure hasn’t kept pace with the growing population. Traffic jams, as everywhere in the world, are incredibly annoying and travelling in Bangalore makes one wonder what exactly inspired Thomas Friedman to sing praises of this city in “The World is Flat”.

It’s been four days since Manmohan Singh underwent coronary bypass surgery. The prime minister is said to be making “rapid progress” and is well on his way to recovery.

Back in 1990, Singh had bypass surgery in Britain and later underwent angioplasty at a private hospital.

But this time, he chose to be admitted to the All India Institute of Medical Sciences (AIIMS) in New Delhi rather than go abroad or enter a private facility.