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India Factfile - Infrastructure |
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| Outsourcing
Services |
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Accounting
& Finance |
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Financial Accounting |
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General Ledger |
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Accounts Payable |
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Accounts Receivable |
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Billing |
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Payroll |
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Bank Reconciliation |
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Financial Analysis |
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Budgeting & Forecasting |
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Tax
Preparation Services |
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| The infrastructure sector
covers the services of transportation (railways, roads and road transportation,
ports and civil aviation), communications (telecommunications and
postal services), electricity and other services such as water supply
and sanitation, solid waste management and urban transport. |
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| The lack of adequate infrastructure
has been constraining the growth performance of the economy. In the
last decade there has been a vast evolution of the nature of State
intervention in this sector. Government has significantly shifted
away from the direct production of public goods to also focussing
on the regulatory and policy framework and private-public partnership
to generate adequate provision of these public goods. |
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| 1. |
Power
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i. |
While power generation has
risen in recent years, end-consumers of electricity continue to experience
serious problems in terms of reliable access to electricity. |
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ii. |
The installed power generation
capacity in India has increased from 1,400 MW in 1947 to 1,12,058.42
MW as on 31st March 2004 comprising 77.968.53 MW thermal (69.6%),
29,500.23 MW hydro (26.3% ), 1,869.66 MW wind (1.7% ) and 2,720 MW
nuclear (2.4%). |
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iii. |
In 2003-2004, India had
an energy shortage of 7.1% and a peaking shortage of about 11.2%.
The country still needs an additional 100,000 MW to meet the growing
demand for electricity over the next 8-10 years. According to industry
estimates, domestic and foreign private companies will need to invest
a total of about $100 billion in power projects to bridge this deficit. |
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iv. |
Power generation during
2003-2004 was 558.134 BUs comprising 466.618 BUs thermal (83.6%),
73.796 BUs hydro (13.2%) and 17.720 BUs nuclear (3.2%). |
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| 2. |
Communications
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i. |
By the end of 2003-2004,
India was the tenth largest telecom network in the world, measured
in terms of the number of phones. The country has an investment potential
estimated at US$ 37 billion by 2005 and US$ 69 billion by 2010. At
the same time, there has been a continuous shift in the technology
of access from fixed line to mobile telephony. In 2003-04, fixed lines
grew by less than 3%, while mobile telephones grew by 159.2%. As on
31 May 2004, the network comprises of 77.93 million telephone connections
and over 1.79 million Public Call Offices (PCOs). There are over 27.17
million cellular subscribers in the country and the cellular customer
base is growing at the rate of about 1 million per month. As per latest
estimates of 30th November 2004, there are overall 90.57 million telephones
and the teledensity had risen to 8.37 .Tele-density (number of telephone
per 100 population) is an indicator of the expansion of telecommunication
services in the country. India's teledensity is still far below that
of China (43+), USA (116+), Australia (123+) and UK (143+). |
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ii. |
Fully automatic International
Subscriber Dialling (ISD) service is available to almost all the countries.
The total number of stations connected to National Subscriber Dialing
(NSD) as on 31 May 2004 is 31,686. In the field of international communications,
tremendous progress has been made by the use of satellite communication
and submarine optical fibre links. The voice and non voice telecom
services, which include data transmission, fascimile, mobile radio,
radio paging and leased line services, cater to a wide variety of
needs of both residential and business customers. |
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iii. |
A high bandwidth connecting
a country to the world, for both voice and data traffic is increasingly
seen as one of the barometers of progress in integration into the
world economy. In India's case, this is particularly critical, since
this connectivity is the foundation underlying the growth of services
exports from the country. As of 2003-04, India has a total of 20.5
Gigabits per second of international connectivity. |
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iv. |
Of the total rollout of
telephone collections (basic and cellular) as on 31st May, 2004, private
sector accounted for about 41% and the public sector accounted for
59%. |
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v. |
The introduction of competition
in the telecom sector has led to a dramatic drop in tariffs. In particular,
GSM tariffs have dropped from Rs. 14.5/minute in March 1998 to Rs.
0.77/minute in March 2004. National Long Distance (NLD) and International
Long Distance (ILD) rates have also dropped dramatically by the shift
away from a monopolistic market to a competitive market. These declines
in prices are even more drastic when adjusted for inflation - prices
of other goods have risen while the prices of telephone calls have
come down. |
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vi. |
The Indian postal network
is among the largest network in the world in terms of area covered
and population served, and constitutes an important mechanism of achieving
transportation and communication. The Indian postal system currently
provides 38 services which can be broadly divided into four categories:
Communication services (letters and postcards), Transportation services
(parcel), Financial services (Saving Bank, Money Order, Postal Life
Insurance) and Premium Value Added Services (like speed post and business
post). The Post Office Savings Bank is the largest bank in India in
terms of network, accounts and annual deposits. As of March 31, 2003,
there were around 156000 post offices or outlets, of which around
89% were outside cities. |
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| 3. |
Transportation
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The present transport system
comprises several modes of transport including rail, road, coastal
shipping, air transport, etc. |
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i. |
Railways |
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Railways provide the principal mode
of transportation for freight and passengers. The network of Indian
Railways is spread over 63122 route kilometre (RKm), comprising broad
gauge (45622 RKm), metre gauge (14364 RKm) and narrow gauge (3136
RKm). Around 26% of this network is electrified. During the year 2003-04
the number of passengers carried by the Railways was 5112 million,
an increase of 2.85% over 2002-03. |
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Indian Railways faces a problem with
respect to its competitiveness vis-à-vis other means of transportation,
particularly the road transport. Railways share of the freight and
passenger traffic has been coming down. The Railways are also facing
financial problems. The loss of market share to road transport, lack
of operational flexibility, especially in pricing, high costs, a huge
pension and other liabilities, etc. have all combined to bring railways
finance to the brink of collapse. |
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World Bank data reveals that despite
staff reductions over the last decade, the labour productivity of
the Indian Railways is approximately half that of its counterpart
in China, and a quarter that in South Africa. Unclear and fragmented
responsibilities for different aspects of supply and management of
services and infrastructure hampers efficiency by obscuring accountability
as well as the pressure to perform. The deteriorating efficiency of
the Railways is reflected by the rising operating ratio (the ratio
of total working expenses to gross traffic receipts). From a revised
figure of 92.5 per cent in 2002-03, the Railway Budget pegged the
ratio at 94.1 per cent for 2003-04. |
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ii. |
Road Network |
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As per National Highway Authority of
India estimates (January 2005), the total road network of India is
around 3.3 million km (approximately). National Highways with a length
are 65,569 km, are less than 2 % of network but carry 40% of total
traffic. State highways have a length of 1,31,899 km, Major District
Roads 4,67,763 km and Village and Other Roads 26,50,000. |
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There has been a major shift in transportation
mode from Railways towards the Road sector. Roads now carry 85% of
the passenger traffic and 70% of the freight traffic. The number of
vehicles have been growing at a rapid pace of 12% per annum over the
last few years and traffic on the roads is growing at 7-10% per annum.
The share of road in total traffic has been growing from 12% of freight
traffic and 31.6% of passenger traffic in 1950-51 to a projected 65%
of freight traffic and 85% of passenger traffic by the end of the
Tenth Plan period. |
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The main constraints for road transport
are poor riding quality of roads, weak and narrow culverts and bridges
with insufficient clearance for movement of higher dimensional vehicles
and octroi and check posts. Only 2 to 3 % of the national highway
is 4 laned. Most of the network is still two lane, providing low service
standards and slow vehicle speeds. At the other extreme, about 40%
of villages are not connected by all-weather roads and have thus limited
access to economic and social infrastructure and opportunities. Road
maintenance throughout the network is dismal, contributing to both
poor pavement conditions and the loss of all-weather accessibility. |
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The rapid expansion and strengthening
of the road network, therefore, is imperative, both to provide for
present and future road traffic and for improved accessibility to
the hinterland. The Tenth National Plan has assigned a high priority
to a National Highway Development Plan for the construction of a Golden
Quadrilateral of high capacity, high quality highways, linking the
four major cities, as well as similar highways along North-South and
East-West corridors, to help integrate the whole country. |
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iii. |
Ports |
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India has about 5,600 km of main coastline
serviced by 12 major ports and about 185 other ports. The major ports
are under the purview of the Central Government, while other ports
(popularly termed as minor/intermediate ports) come under the purview
of the respective State Governments. |
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There are 11 major ports which are managed
by the Port Trust of India under Central Government jurisdiction and
139 minor operable ports under the jurisdiction of the respective
State Governments. The major ports are located at Calcutta/Haldia,
Mumbai, Jawaharlal Nehru Port at Nhava Sheva, Chennai, Cochin, Vishakhapatnam,
Kandla, Mormugao, Paradip, New Mangalore, and Tuticorin. The major
ports handle 90 per cent of the all- India port throughput, and thus
bear the brunt of sea borne trade. |
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The capacity of Indian ports increased
from 20 million tonnes (MT) of cargo handling in 1951 to 390 MT as
on 31 March 2004. Inland water transport today accounts for only 0.15%
of the domestic transportation, and there are opportunities for considerable
growth. There has been a growth of over 15% per annum in container
traffic over the last few years. There is still a considerable lag
when compared with the largest international ports. The largest port
in the world in 2002, Hong Kong, processed 19.1 million Twenty-foot
equivalent units (TEUs). The 10th largest port, Antwerp processed
4.8 million TEUs. In contrast, JNPT handled around 2 million TEUs
in 2002-03. |
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iv. |
Aviation |
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Domestic air traffic grew by 9.3% in
the period January to December 2003 over the same period in the previous
year. Demand for travel to India from other countries in the winter
of 2003 increased by nearly 23%. |
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The Airports Authority of India (AAI)
manages 126 airports, which include 11 international airports, 89
domestic airports and 26 civil enclaves at Defence airfields. AAI
also provides Air Traffic Management Services over entire Indian Air
Space and adjoining oceanic areas with ground installations at all
airports and 25 other locations to ensure safety of aircraft operations. |
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The airports at Ahmedabad, Amritsar,
Bangalore, Goa, Guwahati, Hyderabad and CIAL (Pvt.), in addition to
those at Mumbai, Delhi, Calcutta, Chennai and Thiruvananthapuram,
are today International Airports open to operations even by Foreign
International Airlines. Besides the International flights by National
Flag Carriers operate from Calicut, Coimbatore, Tiruchirappalli, Varanasi,
Jaipur and Gaya airports too. Tourist Charters now touch Agra, Coimbatore,
Jaipur, Lucknow, Patna airports etc. |
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Approximate flight times: From London
to Delhi is 9 hours, to Kolkata (Calcutta) is 12 hours, to Chennai
is 12 hours 30 minutes and to Mumbai is 9 hours. From Los Angeles
to Delhi is 25 hours 30 minutes. From New York to Delhi is 18 hours.
From Singapore to Delhi is 5 hours. From Sydney to Delhi is 10 hours. |
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Despite a fast-growing economy, India
has a small air travel market due to steep fares inflated by high
fuel taxes and other industry levies. But now stiff competition among
airlines has triggered a price war that helped the domestic air travel
market expand a lot. |
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Today, every US citizen makes on average
2.2 air trips each year. The corresponding figures are just 0.02 trips
per year for India. There is therefore huge potential for air travel
growth. |
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One, a fast growing economy will mean
more business travellers. Two, as income levels rise, domestic travel
and tourism will be on the rise, pushing up demand for air travel.
Third, a whole new segment of people who currently travel by road
or rail now could start flying, maybe even flying frequently, if air
fares are more affordable. This third category is what could drive
explosive growth in the sector. For the record, in the financial year
2003-2004, the Indian Railways carried around 52 million passengers
in its premium class products - that is, air-conditioned and first-class
coaches. The concept of low-cost carriers(LCC) is gaining popularity
across the globe. |
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