Slow Pace Reforms & Limited Long-term Funding Options hinder Infrastructure Development in India

According to the report, titled Can India's developing infrastructure keep pace with economic growth, published by rating agency Standard & Poor's, slow pace of reforms and limited long-term funding options negetively impact infrastructure development in India.

In the report, the rating agency analused the key factors hindering the infrastructure growth. It mentioned that the government stepped up infrastructure spending in recent years, but a slow pace of reforms and a lack of long-term funding options were constraining the sector's growth.

India's inadequate infrastructure, highlighted the report  proved to be a major roadblock to the country's target of achieving a 9-9.5 per cent annual growth in 2012-17.

increasing urbanisation in India in recent years resulted in manifold growth in demand for infrastructure. The demand was likely to keep increasing in step with growth in the Indian economy.

In order to keep up the pace of infrastructure development, reforms were necessary to create a robust framework with transparent policies for project execution and funding. Constraints in securing clearances, land rights, and long-term funding could cause companies to fall short of their targets.

The country's power deficit is fuelling demand for energy projects, while rapid industrialisation and urbanisation are creating an urgent need for efficient road and rail network and other improvements in infrastructure.
The 12th Five Year Plan focuses on removing some of these roadblocks and creating a sustainable frameworkfor private sector participation.