The sweeping economic reforms undertaken since 1991 have unleashed and stimulated domestic and foreign investments, taking India firmly into the forefront of investment destinations. The government, keen to promote investment in the country has radically simplified and rationalized policies, procedures and regulatory aspects, and thus foreign investment is welcomed in infrastructure sector. Infrastructure is a critical input for industrial and overall economic development, and plays a major role in promoting economic growth through enhancing productivity, improving competitiveness and reducing poverty. The expansion and efficient use of infrastructure is one of the key issues for development in India. Infrastructure development offers the foundation on which a country can seize and capitalize on the opportunities ushered in by globalization and regional integration. It also plays an important role in `empowering the poor,' enabling them to participate in the growth process. Large infrastructure investments may not have immediate effects on poverty reduction, but they are critical to enable a country to achieve long-term growth and are the key to economic change. This paper reviews the regulatory reforms in the infrastructure sectors in India and focuses on only two sectors, i.e., telecommunications and power sectors, and discusses issues and concerns in this regard.
Infrastructure can deliver major benefits in economic growth, poverty alleviation, and environmental sustainabilitybut only when it provides services that respond to effective demand and does so efficiently.
The amalgamation of developing country economies into a world economic system is taking place at a rapid pace, driven by a near collective push towards trade and capital market liberalization, international corporate strategies and technological change. A prominent feature of the ongoing global economic change is that the developing countries are active participants, as both agents and beneficiaries of the change. Nevertheless, an increasing number of developing economies face a similar quandary, marked growth in demand for roads, power, telecommunications and other infrastructure services outstripping supply. Infrastructure's diverse modes function as a system, providing supporting services to a wide range of economic and social activities, a crucial enabling environment for economic growth and quality of life. |
