Infra Sector Still has Potential, Decides Panel

Suresh Shenoy and Sudhakar Shenoy (R)

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Kolkata, India – Is the India growth story on? How will the country provide employment to the rising population? Will development of coasts and the consequent shift of population lead to a social upheaval? How does India manage to solve power problems?

On Day 2 (Dec 8) of the Pan IIT Global Conference 2012, a panel chaired by IITian Sudhakar Shenoy tried to find solutions to all these questions and more at the session called “Investment in rural and urban development.” Panellists included  Vinayak Chatterjee, chairman and MD, Feedback Infra; Subrata Paul, Director, Bengal Aerotropolis and Ashish Wadhwani, partner, IvyCap Ventures.

 Chatterjee painted a rosy picture of the infrastructure industry, spelling out 12 reasons why infrastructure development will get a fillip in India. These include the reforming factor market, a public private partnership (PPP) market which is six times that of China, more transparency in bidding process, a power push in the 12th five-year plan, a comprehensive land act, the largest roads program, a rapidly growing real estate sector among others.

‘The 11th five-year plan spoke of investment worth $500 billion. Out of that $480 billion has been achieved which is more than 90 percent. There is no reason to lose hope,’ said Chatterjee.

 According to Paul, the real challenge is creating employment for the rising population. ‘Cities will now be created around airports, highways and freight corridors,’ he said, giving the example of DMIC (Delhi-Mumbai Industrial Corridor), a high-speed multi modal corridor.

 ‘Like the Bengal Aerotropolis in Durgapur which will be a city with logistics, IT park, housing and the works and a Rs 100 crore investment, there could be freight corridors between Kolkata and Kharagpur and Kolkata and Asansol,’ he pointed out. The focus, he said, should be on creating new cities.

 New Age problems need new solutions, felt Wadhwani. ‘Infrastructure is a policy intensive sector. The need for innovation cannot be over-stressed,’ he said. Wadhwani said his company is trying to drive innovation and create business models. Twenty five per cent of the earnings, he said, would go back to institutes of choice investors and fund incubation activities there. ‘The potential to create innovation gives us a chance to address issues of infrastructure,’ said Wadhwani.

 Shenoy pointed out that only the manufacturing sector can provide employment to so many people in the coming years. And for that, development of ports (which would help in exports and keeping transport costs low) is essential. Paul agreed, adding: ‘Four ports and two airports will come up in the DMIC.’

 But will a shift to the sea lead to a social upheaval? ‘Transport should see balanced growth of manufacturing act rather than port-based development. Growth in most of the government-run ports have slowed. India is saved by rapid growth of private ports. Coastal development will lead to tremendous social upheaval,’ agreed Chatterjee.

And what about connecting the West and East coasts, asked Shenoy? Chatterjee reminded the audience about the ambitious river-linking plan that was revived by the Atal Behari Vajpayi government but later junked when the United Progressive Alliance (UPA) came to power.

 There were interesting observations regarding the power sector with Shenoy highlighting that the use of industrial gensets lying idle could result in surplus power in the grid which can be stored and supplied to regions prone to blackouts. 

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