|
|
|
|
Infrastructure development has run into a brick wall with the Centre and State governments slothful in the handling of 'growth centres' in industrially backward areas. By M.V. Ramakrishnan
The connection between Government and business is both direct and indirect. Public sector undertakings are an integral part of the business world, and the Government's economic and commercial policies have a direct bearing on business. The indirect connection is in the form of subsidies for agriculture, industry, and exports; loans given to entrepreneurs through the Government's financial institutions; and infrastructure created for the benefit and development of private enterprise. In the context of big business, infrastructure development means massive expansion and modernisation in the transport, power, and telecom sectors. In the case of smaller enterprises, it concerns the setting up of industrial estates, which provide a fair measure of basic facilities like proximity to existing railheads and adequate water, drainage, power, telecommunications, and banking. Particularly in industrially backward areas, the Government's involvement of the latter kind are necessary. Therefore, the Government of India took a step in the right direction in 1988 when it decided to set up 100 'growth centres' all over the country. All the States and Union Territories were to implement this Centrally sponsored scheme. Each growth centre was to be located in 400 to 800 hectares of land, to be acquired by the State/UT Government not far away from a district town, and was to have a budget of Rs 30 crore for building infrastructure. The Central Government was to provide Rs 10 crore, and the concerned State Government, Rs. 5 crore. Specified all-India financial institutions (IDBI, ICICI, IFCI, and HUDCO) and nationalised banks were to contribute Rs 5 crore, and each centre was to borrow Rs 10 crore in the open market. Funding commenced in 1990-91. So far, so good. But what actually happened
afterwards is a very sad story, which has been told by the Comptroller and
Auditor General of India (CAG) in two audit reviews in l995 and 2000. It was decided to complete 70 growth centres in the first phase, which called for financial resources of Rs 2,100 crore. But up to March, 1994, the Central Government had released only Rs 68 crore for 46 centres, and the State Governments had given only Rs 11 crore to 28 of those centres. The financial institutions and banks gave nothing, and no money was borrowed in the market by any centre. Moreover, even these sparse resources were not fully utilised and at the end of four years, not less than Rs 33 crore remained unspent (out of Rs 79 crore). The State and UT governments were extremely slack in submitting prescribed progress reports: and in many cases there was no progress whatsoever to be reported anyway! The CAG had observed in 1995: "In view of the extremely slow progress in the development of the growth centres, there is no likelihood of their impact on the promotion of industrialisation in the identified backward areas." Tenth-Year Scenario The Central Government had fixed a target of 67 growth centres to become operational by 1996-97, but the growth pangs of the centres continued both in financial and physical terms. The projections called for resources to the tune of Rs 2,000 crore, but only about Rs 500 crore was provided by the Central Government (Rs 274 crore) and the State Governments (Rs 222 crore) upto March, 1999. Nothing was contributed by the financial institutions and banks, and no money was borrowed in the market by any centre. In the case of 43 centres, the provision amounted to less than 50 per cent of the specified budget; and in 25 of those cases, it was less than 10 per cent. And even out of this, only about Rs 270 crore was actually spent on infrastructure-building. The State Governments were also slack in acquiring land for the centres. No land had been acquired at all in 22 cases, where the progress was therefore zero. In 31 other cases, land had been acquired only partially. Naturally, with such unrealistically scarce resources, the physical progress in creating the required infrastructure was woefully poor almost everywhere. At the end of 1998-99, there were no approach roads in 41 centres (out of 67), no water supply in 37 centres, no proper drainage in 51 centres, no power in 46 centres, and no telecom facilities in 50 centres. None of these facilities were available in 33 centres in 16 States. Flawed and Futile The ultimate goal of the scheme, of course, is to enable a large number of local entrepreneurs to set up new viable industrial units in every growth centre; and the facts mentioned in the CAG's recent report in this regard present a very dark picture. By the tenth year of the scheme, viz., 1999-2000, only 260 industrial units in all had been set up, in 13 growth centres in six States: Rajasthan (100 units in 4 centres), Madhya Pradesh (65/5), Himachal Pradesh (41/1), Goa (37/1), Haryana (15/1), and Punjab (2/1). Data were not available in respect of seven centres in three States (Maharashtra, Uttar Pradesh, and West Bengal). In the remaining 47 centres spread over 19 States, not a single industrial unit was established. All told, the scheme had cost the Central and State Governments about Rs 600 crore (including land acquisition cost of Rs 330 crore), with only such dismal results to show. The amazing thing is that this hopelessly flawed and futile scheme is still in force, and the Central and State Governments are very likely to go on pouring more and more public funds into this huge drain for years to come. |
|
Issue Contents Write to us Subscriptions Syndication INDIA TODAY | INDIA TODAY PLUS | COMPUTERS TODAY © Living Media India Ltd |
