Infrastructure Under The NDA

A Reality Check- II

Abhijit Mukhopadhyay

Shantanu De Roy

RAILWAYS

Continuing with its trend to advertise about programmes which are yet to be implemented a railways ministry advertisement on February 22, 2004, states among other things:

• Announcement of Rs 20,000 crore distant rail connecting scheme to connect remote areas, to be completed within next 5 years.

• Initiation of Rs 15,000 crore Rashtriya Rail Vikas Yojna to strengthen the golden quadrilateral, connect ports, build bridges on Ganga, Brahmaputra and Kosi, and to finish uncompleted works.

                                                                              Table 1

In reality, however, there has been very negligible addition to the electrified and total length of the railways network. The latest available figures suggest that only about 200 kms were added from 1998-99 to 2000-01. Despite the railways being much more energy efficient than road transport, the government has starved the railways of investments. The following facts bring out the pathetic state of Indian railways under the Vajpayee regime.

a)    For the first time in its history, the railways did not pay dividends to the government of India in 2000-01 and 2001-02.

b)    Even worse, after the steady decline of the accident rate per million train kilometres from 5.5 in 1961 to 0.57 in 1996-97, the figure has been rising and currently stands at 0.65.

c)     The share of the railways in the total transport outlay has continued its steady decline.

The railways carry 45 per cent of the total freight in the country including 89 per cent of the 8 major bulk commodities – coal, steel, petroleum, fertiliser, cement, food grains, iron ore and raw materials to steel plants. The high density corridor connecting the four metros – Delhi, Mumbai, Chennai and Kolkata, comprises only 16 per cent of the total railway network but carries 65 per cent of the total freight traffic and 55 per cent of the total passenger traffic. This already saturated corridor, which is in dire need of augmentation, has been completely neglected by the NDA government.

OIL

On February 21, 2004, the ministry of petroleum and natural gas ran an advertisement, which contained some curious claims:

• A commitment of no further increase in domestic LPG and kerosene prices

• 90 exploration blocks awarded through global tender under NELP, against 22 blocks in previous 10 years, in order to ensure self reliance

• New oil and gas field discoveries

The advertisement also claimed credit for the disinvestment of government stakes in GAIL and ONGC. The price of fuel, especially kerosene which caters to the needs of a large section of the poor, has increased manifolds under the Vajpayee regime. 

                                                                       Table 2

Estimates based on the Consumer Price Index suggest a 145 per cent hike in kerosene prices over 2000-01, which fell marginally in the next year only to rise by 21.3 per cent in 2002-03. The fact that the petroleum ministry is making a commitment not to hike prices any more through a newspaper advertisement shows that the government is afraid of the discontent within the masses on account of this tremendous hike in fuel price. However, there would hardly be any takers for such nonsensical claims.

As far as the claims of new oil exploration ventures and oilfield discoveries are concerned, the results speak for themselves. While the import of crude oil has almost trebled from 1995-96 to 2001-02, domestic production has declined by nearly 3 million tonnes during the same period. So much for the propagated myth of new oilfield discoveries and self reliance in energy resources.

                                                                        Table 3

The most appalling feature of this government is the celebration over the disinvestment of profit-making PSUs. Despite the Oil PSUs having earned a huge combined profit of Rs 23,251 crore in 2002-03, the government has undertaken aggressive disinvestment of several strategic units. These privatisation measures can not be justified from the ‘efficiency’ point of view, since the oil giants are highly profitable. Further, it is wrong to argue that privatization measures have contributed to revenue mobilisation since the government stands to loose much more in terms of the stream of profits which would have accrued in the future from these PSUs, than what it mopped up through one time sale. The government, however, far from providing justification for these outrageous privatisation measures has been celebrating it in advertisements.

WATER

The Vajpayee government could have jolly well come up with the following advertisement propagating ‘big achievement’ in respect of drinking water:

Bottled water sold in the previous 50 years: negligible!

Bottled water sold during 5 years of NDA rule: over Rs 5000 crore!!

Scarcity and poor quality of drinking water has led to the emergence of a huge bottled water industry worth over Rs 1,000 crore per annum, with drinking water being sold at the price of milk. Over 200 million people in India, by conservative estimates, do not have access to safe drinking water. About 15,000 habitations in the country are reported to be without any source of potable water; about 200,000 villages are only partially covered by drinking water schemes, and the existing water sources in about 250,000 villages have severe problems of quality. Urban water supply has also become notorious for its irregularity and poor quality. Fresh-water availability per capita, which had gone down from around 5,250 cubic metres in 1955 to around 2,500 cubic metres in 1990, has fallen to below 2000 cubic metres at present and is projected to drop below the internationally recognised "crisis" level of 1000 cubic metres by 2015. Various international agencies have estimated that water scarcity in India will become acute by 2025. Irrigation efficiencies are estimated to be around a very low 35 per cent, mostly due to poor maintenance and low budgetary allocations for the purpose.

The two major elements of the BJP's response to the problem of water resources, inter-linking of rivers and privatisation, are recipes to aggravate the situation further. Numerous studies by different agencies and expert groups cite serious problems in the proposed River Inter-linking Project, which is estimated to cost around a huge Rs 560,000 crore, not to mention the inevitable cost escalation. Most state governments have also objected to the diversion of water from rivers passing through their states, bringing into question the source from where water proposed to be transferred to deficit areas would come from. All these problems remaining unaddressed, the BJP-led government is going ahead with full steam in advertising the proposed "Garland Canal" linking major rivers.

Faced with growing shortage of water for irrigation in rural areas, and water scarcity in urban areas, reckless exploitation of groundwater, mainly by private and corporate parties, is accelerating under the patronage of the government. Groundwater has been allowed to become the ‘private property’ of the rich who has the financial capacity to invest in its extraction and distribution. Trade in groundwater in India today is close to Rs 3000 crore, with around 50 per cent of the urban domestic and industrial demand being met through groundwater. And yet, despite public pressure, neither the NDA's National Water Policy nor its various legislative or administrative measures have showed any desire to regulate or control this dangerous trend. 

This should surprise no one, since the BJP and its allies are only following the World Bank, which has long argued for privatisation of water. World Bank-financed projects in Latin America and Africa have even supported small-scale water businesses by rich landowners. The NDA's National Water Policy explicitly states: "Private sector participation should be encouraged in planning, development and management of water resources projects for diverse uses, wherever feasible. Private sector participation may help in introducing innovative ideas, generating financial resources and introducing corporate management and improving service efficiency and accountability to users." The NDA’s approach has therefore been contradictory to the preservation of water as a precious national resource, which should necessarily be under public control.

Conclusion

Any developing economy, due to some reason or the other, may show some growth for a short period; but a sustainable long-term growth path, which can ensure prosperity for all sections of the people, needs strong foundations. Infrastructure is one of these basic foundations of an economy, for the simple reason that without well-developed infrastructure a high rate of investment cannot be sustained. The experience of the past decade has shown that in crucial areas of infrastructure, where projects have high gestation lags and high costs, private participation was far below expectations. The major onus of developing infrastructure therefore rests upon the government, which needs to undertake public investments in building infrastructure. The NDA government, however, which has remained faithful to the World Bank dictated agenda, has failed singularly to give any major thrust in the infrastructure sector. The false and often ridiculous claims being made on the eve of the elections are nothing but means to hoodwink the people.