With a view on the upcoming budget, i thought to write on the importance of infrastructure in our country, both social i.e education, health etc and physical; roads,railways etc.
For an optimist Indian, jammed roads, crowded airports, full internal flights and booked out hotels are the signs of a growing economy at a robust pace. At the same time it also brings home the reality, that is, the poor infrastructure scenario.
On the other hand with the ever increasing human resource of the country the urgent need is to reform and increase spending on social infrastructure sectors including education and healthcare. Till the time people don’t feel the need of good education, the scenario at the basic level of the country is not going to change.
The dilemma therefore is to balance in spending amongst physical and social infrastructure spending in the upcoming budget. India spends almost 5% towards infrastructure spending while china spends almost 9-10%.Thus the need of the hour is to increase the % spending on these sectors. Both the sectors of the economy require urgent attention.
If the physical infrastructure is the foundation, the social infrastructure is building, none of them can sustain in the absence of other.
The road connectivity, electricity, railways etc are the basic amenities, which any business needs for its development. We also require efficient healthcare and education systems so that the vast human resource – the key to India’s future growth – gets adequate attention.
Having said that, fiscal responsibility and budget management (FRBM) Act of 2003 and rising fiscal deficit and inefficiency of public sectors has put a limit on the public spending on infrastructure. Therefore, it has become important that private investors play an active role in building physical and social infrastructure projects.
The spending on social infrastructure is indeed need of the hour. Apart from financing issues, I think India also lacks in proper implementation and accountability in such initiatives. It is here public private partnership model may be more relevant.
ReplyDeleteyes it is high time to look out the way government spend on both physical and social infrastructure.Look at the education sector where the govt spend equal to world average which is around 3.7 percent of GDP.But if we look at this little in dip,we found that out of the total spending on education 91.18% goes on revenue exp like salary of teacher etc and meagre 0.82% goes on capital exp side.So there is immense need on the way govt spend.
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