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For human beings, the age of 63 is pretty old. It means that the best years of their lives are
perhaps behind them. If they are in reasonable health, they can expect to lead an active life
for a decade or so more. After that, the inevitable decline begins.

For nations, though, 63 years is not even middle age. While different nations age differently,
many of them just about begin to hit their stride after the first 50 years. Certainly, this is true
of India. From the time India won freedom from British rule and celebrated its first
independence day ² on 15 August 1947 ² to the finalisation of its constitution and its
formal adoption on 26 January 1950, the nation was essentially in a transition phase. The real
work of nation building started only after the constitution got finalised, the new systems
started being put in place, and the institutions inherited by the first Indian government from
its British predecessor began being reoriented to serve the needs of the newly born nation.

Our early leaders were attracted by the socialist ideology and the next four decades were
spent trying to get this ideology to work. As is apparent with the benefit of hindsight, this did
not work out well despite the best of intentions. The financial crisis of the late 1980s was, in
retrospect, a good thing for the country ² a wake-up call, so to say. India started opening up
its market and economy to the world ² albeit reluctantly ² from 1990 onwards. But despite
occasional hiccups, it has paid better than reasonable dividends in the two decades since
economic liberalisation started.

It makes sense to take stock of a country¶s progress on its birthday. Examining several
different parameters give you a fairly good idea of where we stand as a nation today. Many of
them are purely economic parameters ² the growth rate of the economy, the absolute size of
our economy, the rate of employment creation, the state of hard infrastructure development.
Others have to do with the general well-being of the citizens of the country ² their life
expectancy, the quality of life, the state and opportunities for education, the overall
environment in which we live, etc.

We decided to look at what the data showed on 14 different parameters. We also

commissioned market research agency Synovate to conduct a survey on what the citizens
living in some of our biggest metros felt about the quality of infrastructure in their cities.

The results are decidedly mixed. The good news is that we have come a long way. We are a
$1-trillion plus economy. Even in 2009, when the world economy was in the doldrums after
the great global financial meltdown, India managed to grow at 6.8 per cent. We are living
longer and the state of education has improved marginally. Despite the corruption and all the
inefficiencies, physical infrastructure as a whole is getting better. At least four of our airports
can be termed as being up to international standards ² perhaps they do not rank among the
very best in the world, but they are nothing to be ashamed of. Highways are getting built ²
not at the pace we would like them to be built perhaps, but quite rapidly nonetheless. Our
telecom infrastructure is one of the great success stories of recent times.

And then there are the depressing stories. Of rampant inefficiencies and corruption in the
execution of the Commonwealth Games, and for most big infrastructure projects. Of
congested ports. Of the pitiful state of power in most states.

In terms of quality of living in the big cities, the Synovate survey shows that while things
have improved, in some respects the quality of life has actually gone down. Most Indian
metros still cannot compare with the west in terms of basic amenities and infrastructure. Mick
Gordon, managing director, Synovate India takes a rather gloomy view: ³Our survey shows
that India has to cover a lot of ground to be par with some of the other emerging markets, at
least in the perception of urban Indians. Urban Indians in our top cities do not have access to
basic amenities like continuous electricity and running water; healthcare, drainage and
sewerage are a constant strain for urban Indians in the cities of Delhi, Mumbai, Kolkata and
Bangalore.´

But an expatriate senior executive pointed out the other view. ³India is still on the countries
where jobs ² and high paid jobs ² are being created,´ he remarked. ³Sure you have better
roads and power situation in the US and Europe. But you do not have the jobs. I think it is a
fair trade-off.´

We could say that India at 63 is a glass both half full and half empty.

bweditor(at)abp(dot)in

(This story was published in Businessworld Issue Dated 23-08-2010)

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The ports sector presents a mixed picture. Shipping minister G.K. Vasan told the parliament
recently, major and non-major ports in India achieved a total cargo throughput of 844.9
million tonnes, reflecting an increase of 13.6 per cent in 2009-10, compared to a marginal
increase of 2.5 per cent in 2008-09. Separately, growth in cargo handled at major and non-
major ports was 5.7 per cent and 33.2 per cent, respectively, compared to 2.2 per cent and 3.3
per cent, in 2008-09. The robust growth in India¶s seaborne cargo traffic in 2009-10 reflects a
strong recovery.

Comptroller and Auditor General of India in its 2010 report estimated a loss of more than Rs
1,400 crore per annum due to poor infrastructure at major ports. It also stated that ports in
India have not been able to improve their infrastructure, despite spending of Rs 55,800 crore.

Click here to view enlarged image

It is not as though no effort is being made. The National Maritime
Development Programme (NMDP) is aimed at overhauling India¶s
ports. Of the total 199 ports, upgradation of 47 has been completed
and 71 projects are in progress. For the remaining 81 ports,
upgradation plans are awaiting clearances. In the 12 major ports, 276
sub-projects have been identified for implementation up to 2011-12.

However, a directive that became effective from 2 August, miffed

private players. It stated that if there is only one private terminal/berth
operator in a port for a specific cargo, the operator of that berth or his associates shall not be
allowed to bid for the next terminal/berth for handling the same cargo.

Also, the Centre is yet to take action on the recommendations of an internal committee of the
ministry in 2009 to come out with a berthing policy, equipment policy, stevedoring policy, IT
policy, standardisation policy, and investment policy. The bottom line: India has to have a
strong ports and shipping sector to be a truly powerful economy. 


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If all goes according to plan, in 2010-11, the country is expected to add 21,441 MW of fresh
power projects ² the highest ever in a single year. But here¶s the irony: the country will still
face huge power shortages over the medium term.

Barring states such as Delhi, Sikkim, Himachal Pradesh, Jharkhand and Orissa, which are
expected to meet peak power demand in 2010-11, all other states are expected to face
shortages. As many as 16 of the 28 states may face a shortage of over 10 per cent. Of these,
four states can see a shortage of 30 per cent.

A closer analysis of data throws up another interesting facet. While Delhi is expected to
benefit on account of new projects planned for the Commonwealth Games (such as Dadri,
Jhajjar and Pragati), Chhattisgarh, which has huge coal reserves, is expected to have close to
a five-fold increase in the level of shortages despite having over 50,000 MW of power
projects in the pipeline. Why this anomaly? According to a power ministry official, only one
project is expected this year. The others will spill into the 12th Five Year Plan (2012-17).

Another important factor is that demand is growing faster than supply, even faster than what
the record capacity addition can address. ³There is a lot of latent demand,´ admits S.K.
Soonee, executive director at the Northern Region Load Despatch Centre.

For example, Uttar Pradesh is expected to have more than 2,300 MW added this year, but
forecasts show that the peak power shortage may increase from (-) 21 per cent to slightly over
(-) 29 per cent. In Haryana, which expects to add 1,100 MW, the peak demand shortage is
expected to rise from (-) 7.4 per cent to (-) 31 per cent. And Andhra Pradesh is expected to
add 1,680 MW while the peak shortage in expected to rise from (-) 10.6 per cent to (-) 14 per
cent.

Apart from availability of fuel Click here to view 'In The Pipeline'
and land, Adani Group chairman
Gautam Adani says that it is a    $ &  Ö   &
state¶s power shortage situation
that attracts investments. Gujarat, which is expected to add over 1,600 MW this year, will
still be in deficit of around (-) 9.5 per cent this year. The state¶s energy minister Saurabh
Patel, however, is not too perturbed. He says that within a year, the state will be power
surplus, and has plans to sell power outside the state at Rs 2.8 per unit.

Adding capacity is one way to solve the issue. However, there are projects that get announced
but don¶t see the light of day. So, there has to be a µPlan B¶. Former power secretary E.A.S.
Sarma says that one way to push power supply is by increasing the efficiency of existing
plants.

The bottom line: India needs both new power projects as well as improved efficiencies in
existing plants to meet the burgeoning demand.


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Telecom is one sector that has seen spectacular success in recent times. The growth of mobile
telephony, in particular, has made India the world¶s fastest-growing telecom market.
Consider this: in 1995, when private operators launched their services, the number of mobile
subscribers in India was 77,000. In 2000, that count stood at 3.6 million ² a 116 per cent
CAGR (compound annual growth rate). Since then, thanks largely to competition and
increasing affordability among consumers, the sector has grown manifold. According to data
released by Telecom Regulatory Authority of India (Trai), at the end of June 2010, India had
653 million mobile connections, with 10-15 million subscribers being added every month. On
an average, developed countries added 3-4 million subscribers, latin america added about 5-7
million, Africa added 1-1.5 million and asia added 8-10 million.

According to a research conducted by the Indian Council for Research on International

Economic Relations (Icrier) in 2008, states with 10 per cent higher mobile phone penetration
enjoyed 1.2 per cent higher annual average growth rate than those with a lower teledensity.
However, with new operators offering lower tariffs, telecom giants are facing a fall in
average revenue per user (arpu).

Click here to view enlarged image

Despite operators registering revenues of more than Rs 3,000
crore during 2005-2008, the quality of service has fallen. To
save taxes, companies allegedly have been underreporting
revenues, resulting in government losing more than Rs 1,200
crore of taxes every year. Call dropping, cross-connections,
and SMSs getting lost have become commonplace.
³Operators have reduced their investment, and were hoping
they would get (more) spectrum,´ says Gautam Balakrishnan,
director of Mumbai-based telecom analytics firm, Optsoe
Consultant.

The rise of mobile telephony has sidelined the fixed-line connections. The total fixed-line
connections has fallen from 45 million in 2000 to 36 million at the end of June 2010.
Hopefully, many of these issues will be resolved, given the critical role of communication
services to the economic health of a nation.