| |
Infrastructure investments beat the trends
10/2/2010
The slowdown in GDP growth has hardly had an impact on infrastructure investments, points out the recently released statistics on savings and investments brought out by the Central Statistical Organisation (CSO). The new figures, with 2004-05 as the base year, show that overall investments in infrastructure went up from Rs 253,035 crore in 2007-08 to Rs 307,282 crore in 2008-09, a rise of 21.4% which was only marginally less than the 22% clocked in the previous year when the economy grew by 9.2%.
The buoyancy of investments in the infrastructure sector is remarkable as the investment to GDP ratio of this segment, which includes, electricity, gas & water supply, railways, road, airports and ports, storage and communications, has gone up from 5.1% of the GDP at market prices in 2007-08 to 5.5% in 2008-09, an all time high, even as overall investments in the economy decelerated sharply from 37.7% of the GDP to 34.9% of the GDP.
What accounts for this sharp change in the fortunes of the infrastructure sector? A look at the numbers show that everything is not hunky dory as the growth rates vary substantially within the sector ranging from a substantial 76% in communications, where investments shot up from Rs 33,335 crore to Rs 58,668 crore, to a marginal 7% in the electricity, gas and water supply segment, where it rose from Rs 146,554 crore to Rs 157,869 crore.
But for this moderate growth in electricity and related areas, the growth of infrastructure investments would have been substantially higher as the segment accounts for more than half the infrastructure investments. However, the more important cause for worry is that investments in the sector continue to decelerate sharply, despite the large power deficits and the growing role of gas in the energy segment. The new national income series numbers show that the growth of the segment has steadily decelerated from 34.6% to 31% and further to 15.9% and finally to 7.7% over in the last four years. Reversing the declining trend would call for a significant rework of policies to meet the needs of accelerated growth.
|
|
