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UNIVERSITY OF DELHI SHRI RAM COLLEGE OF COMMERCE MICRO-ECONOMICS PROJECT ON INFRASTRUCTURE IN INDIA

by: kanj saurav b.com(h) ist year roll no: 458 tut group: k-65

mentor: maam neha matlani


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ACKNOWLEDGEMENTS
IT FEELS AN IMMENSE PLEASURE TO PRESENT THIS ROJECT REPORT ON INFRASTRUCTURE IN INDIA. I WOULD LIKE TO NAME THE WEBSITES THAT PROVIDED ME THE NECESSARY GRAPHS AND MINUTE DETAILS OF THE SUBJECT MATTER VIZ, WWW.WIKIPEDIA.COM , WWW.INDIANTRADINGHUB.COM ETC. NEWSPAPERS VIZ, THE ECONOMIC TIMES & THE TIMES OF INDIA FOR SPECIAL ARTICLES AND MY FRIENDS FOR THEIR HELP. I AM HIGHLY THANKFUL TO MY TEACHER NEHA MAAM FOR HER GUIDANCE AND SUPPORT DURING THE PROJECT.

KANJ SAURAV

CONTENTS
ACKNOWLEDGEMENTS INTRODUCTION HISTORY RAIWAYS ROADWAYS AVIATION PORTS TELCOM BIOTECHNOLOGY ENGINEERING INDUSTRY FILM INDUSTRY HEALTH INDUSTRY AN OVERLOOK

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5 8 16 20 22 24 29 31 36 38 40

INTRODUCTION
A nations infrastructure development plays a significant role in its economic growth. A fast growing economy warrants an even faster development of infrastructure. Any discussion about Indias infrastructure has to briefly cover the planning carried out for the countrys economic growth. Infrastructure is the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function. The term typically refers to the technical structures that support a society, such as roads, water supply, sewers, power grids, telecommunications, and so forth. Viewed functionally, infrastructure facilitates the production of goods and services; for example, roads enable the transport of raw materials to a factory, and also for the distribution of finished products to markets. In some contexts, the term may also include basic social services such as schools and hospitals. In military parlance, the term refers to the buildings and permanent installations necessary for the support, redeployment, and operation of military forces. Encompassing all things to all people is hardly a useful way to define infrastructure clouding investors, governments, and their citizens ability to understand, advocate, and direct capital toward durable, networked assets with widespread societal benefits. Primary infrastructure components are generally monopolistic in nature and require large financial commitments for their development, repair and replacement. They can be built, touched, enabled, disabled, and function together to form interrelated, dependent systems that deliver needed commodities and services to society. In doing so, they facilitate economic productivity and promote a standard of living. Infrastructure can then be more concisely defined as The physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions.
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HISTORY
Along with Independence, India inherited famine and poverty from its colonial rulers. There was dire need for housing, health facilities, education, roads, power, irrigation projects and drinking water facilities for millions of underprivileged people. This called for proper economic planning. Unfortunately, the task of planning fell into the hands of those who were sympathetic to the feudal lobbies. These rich and powerful people had less concern for the social uplift of the poverty stricken masses. The outcome was that they lost sight of the main objective of planning the economy by keeping the overall national interest in view. It created economic inequalities among the States and erected roadblocks on the path of building infrastructure. Even today the people in power tend to fall victims to this skewed vision It is 63 years after Independence. Today, the rural population accounts for nearly 70 per cent of the total population, and nearly half of them still live in poverty and illiteracy. How good is the rural infrastructure? The latest report of the National Sample Survey Organisation on village facilities is a revelation in itself. To quote from the report, One fourth of our villages do not have electricity; only 18 per cent of them get tap water; 54 per cent of them are more than 5 km away from the nearest health centre; one third of them do not have pre-primary schools and 78 per cent do not have post offices! Yes, India still lives in its villages. The cities shelter around 30 per cent of the population who contribute to the economic growth. However, the most vital part of economic growth, which is infrastructure, hardly matched the demands of even this 30 per cent of urban dwellers, spreading chaos at the slightest provocation with the danger of turning the clock backwards. This mismatch has been seen in the Mumbai deluge in September 2005 and a little later in Bangalore, shattering the Shanghai dreams that so many harbor. The countrys economy has spread its wings. However, for it to truly take off, the country has to improve infrastructure. One can speed up the process, by revising, revisiting and upgrading the
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development plans with a long-term view. Yes, one has to firmly believe that reforms are the pre-requisite for growth and reforming infrastructure sustains growth. Who does not want to see a doubledigit growth rate of the GDP in the near future?

We will now have a detailed view of all the infrastructural sectors of the economy .

Railways

The first railway on Indian sub-continent ran over a stretch of 21 miles from Bombay to Thane. The idea of a railway to connect Bombay with Thane, Kalyan and with the Thal and Bhore Ghats inclines first occurred to Mr. George Clark, the Chief Engineer of the Bombay Government, during a visit to Bhandup in 1843.The formal inauguration ceremony was performed on 16th April 1853, when 14 railway carriages carrying about 400 guests left Bori Bunder at 3.30 pm "amidst the loud applause of a vast multitude and to the salute of 21 guns." The first passenger train steamed out of Howrah station destined for Hooghly, a distance of 24 miles, on 15th August, 1854. Thus the first section of the East Indian Railway was opened to public traffic, inaugurating the beginning of railways Eastern side of the sub-continent. In south the first line was opened on 1st July, 1856 by the Madras Railway Company. It ran between Veyasarpandy and Walajah Road (Arcot), a distance of 63 miles. In the North a length of 119 miles of line was laid from Allahabad to Kanpur on 3rd March 1959. The first section from Hathras Road to Mathura Cantonment was opened to traffic on 19th October, 1875. These were the small beginnings which is due course developed into a network of railway lines all over the country. By 1880 the Indian Railway system had a route mileage of about 9000 miles.

HIGHLIGHTS
Freight and passenger traffic carried by Indian Railway has recorded an impressive growth. This has been possible due to conscious efforts put in by the railways in improving the productivity of the assets and modernization and technology up gradation in various fields. In some areas like track, signalling, communication systems, computerization, etc., the technology in use is comparable to that in the very advanced countries. We have attempted modernization and technological up gradation of the system to generate maximum capacity with minimum investment and to provide rail transport at the least cost to our users. Production of Rolling Stock After Independence, Indian Railways have set up production units for manufacture of diesel locomotives, electric locomotives, coaches, wheels and axles, diesel components, springs, etc. Technology transfer agreements have also been signed or manufacture of the latest design of electric locomotives (6000 hp), diesel locomotives (4000 hp) and light weight coaches. Metro Railway Indian Railways can also take the credit for introducing an "Underground Metro Railway" for Calcutta. The whole route from Dum Dum to Tollygunge has been commissioned and opened for Commercial operation in 1995 similarly, the country's first elevated Mass Rapid Transit System at Chennai has also been completed; the system connects Chennai Beach to Luz. Konkan Railway The 760 km long Konkan Railway from Roha to Mangalore is nearly complete. This section has 169 major and 1630 minor bridges and 88
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tunnels with the longest one being 6.5 km long. Electrification Electric traction is a pollution-free and energy efficient mode of transportation. About 21 percent of the total route km of Indian Railways, i.e.13509 route km, has been electrified up to March 31, 1997. Gauge Conversion Project uni-gauge has been undertaken to develop alternative routes to connect important places with the broad gauge network, develop backward regions and avoid problems faced at transhipment points. During the Eighth Plan, 6,733 km of meter and narrow gauge track were converted. In the Ninth Plan, conversion of another 6,200 km has been planned. Doubling/Quadrupling of Railway Lines Doubling/quadrupling of railway lines is being carried out on the saturated sections of Indian Railways to increase freight and passenger carrying capacity on these sections. Doubling of 1089 km of track was completed in the Eighth Plan. It has been planned to complete another 2,500 km in the Ninth Plan. Computerised Passenger Reservation Facility "Computerised passenger reservation" facility has been extended to cover over 92 state capitals not having a direct rail links, e.g., Shillong, Itanagar, Kohima, Gangtok, Port Blair, etc.

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FUTURE PLANS 1. Indian Railways propose to meet the challenge through implementations of following thrust areas during the TWELFTH Plan period: 2. Generation of adequate rail transport capacity for handling increasing freight and passenger traffic with special emphasis on development o terminals. 3. Completion of the process of rehabilitation, replacement and renewal of over aged assets. 4. Modernisation and up gradation of the rail transport system to reduce costs and improve reliability, safety and quality of service to the customers. 5. Continue with the policy of unigauge. 6. Introduction of 6000 hp Electric locomotives and 4000 hp Diesel Locomotives employing State-of-Art technology. 7. Expansion and up gradation of inter-modal operations, including containerisation. 8. Improvement of manpower productivity, work culture and staff morale. The broad details of the action plans, disciplinewise, to achieve these objectives are as under: High horse power (4000 hp) diesel locomotives with AC/AC transmission and State-of -the-Art technology are being imported with transfer of technology for their indigenous manufacture at Diesel Locomotive Works, Varanasi, Modern light weight passenger coaches are also being imported with transfer of technology for indigenous manufacture. Improved pay load to tare freight wagons are wagons are also being planned for the
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Indian Railways. Three-phase drive AC electric locomotives of 6000 hp have been imported along with transfer of technology for indigenous Electrification of high-density corridors in order to conserve fossil fuels and provide pollution-free and energy-efficient mode of transportation will also be pursued. Latest design concrete sleepers, modern rail fastenings and head hardened rails are being utilised to strengthen the track. Track maintenance is being increasingly mechanised to improve quality and to reduce the cost and time for maintenance. For enhancing safety, auxiliary warning system, route relay interlocking, solid state interlocking, and track circuiting are being extended over the system. Modernisation of telecommunications, including gradual switching over from analogue system to digital system, which include digital microwave, optical fibre and digital telephone exchanges, are being progressively adopted Railways are also introducing universal train radio communication system between driver, guard and the nearest station to enable immediate response in case of emergencies and accidents. Line capacity works such as new lines, gauge conversion, railway electrification, doublings, improved signalling, etc., and would be carried out on the identified sections so that Indian Railways could carry the projected freight traffic in the Ninth Five Year Plan. It has also been planned to introduce low tare and high pay load wagons with increased axle loads and track loading densities and high horse power locomotives to improve the through-put and average speeds of the trains. More than 94 per cent of the total reservation requirement of Indian Railways is being done by the computerized reservation facilities at present. There are plans to extend these facilities to more stations, satellite locations, city booking offices and the remaining non-rail head state capitals. It has also been planned to do networking of the computerized reservation services. Interactive inquiry systems are being introduced on more and more stations. Self-printing ticketing machines are also being introduced on more and more stations to reduce the time
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required for obtaining a ticket. With the introduction of light weight modern coaches and high horse power diesel and electric locomotives, it would be possible to increase the number of coaches in many trains. Average speeds to the trains would also improve. NETWORK OF RAILWAYS Indian Railways is the largest rail network in Asia and Worlds second largest less than one management, Indian Railways comprise over one hundred thousand track kilometres and run about 11000 trains every day carrying about 13 million passengers and 1.25 million tonnes of freight every day. Despite being reliable, safe, eco-friendly and economical mode of transport, its share in both freight and passenger traffic has come down significantly over the years. The scope for public private partnership is enormous in railways, ranging from commercial exploitation of rail space to private investments in railway infrastructure and rolling stocks. In order to have an integrated development of Transport system, National Rail Development Programme has also been launched in December 2002 envisaging an investment of about US$ 3.5 billion in next 5 years. The programme envisages removal of capacity bottlenecks in the critical sections of railway network. The Golden quadrilateral is proposed to be strengthened to enable running of more long distance passenger trains and freight a higher speed. Programme also envisages strengthening of rail connectivity to ports and development of multi-model corridors to hinterland. Construction of 4 mega bridges costing about US$ 750 million is also included in the programme. Construction of a new Railway Line to Kashmir valley in most difficult terrain at a cost of US$ 1.5 Billion and expansion of rail network in Mumbai area at a cost of US$ 900 million has also been taken up.

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NETWORK OF RAILWAYS

GAUGE Board Meter Narrow Total

ROUTE KM. 40,620 18,501 3,794 62,915

RUNNING TRAVEL KM. 57,088 19,559 3,794 80,441

TOTAL TACK KM. 79,843 24,269 4,224 108,336

Indian railway is a department of Government and the Ministry of railways functions under the guidelines of Minister for railways and assisted by Minister of State for railways. The policy formation and management of Indian railway board comprises of Chairman and six functional members. Wide powers are vested in the Board to effectively supervise the running of 15 zonal railways, metro railway (Calcutta), production units, construction organization and other rail establishments. These are generally headed by General Managers. Four subsidiary organizations under the Ministry of Railways viz. IRCON, RITES, CONCOR and CRIS, undertake specialized jobs in India and abroad, contributing to Indian railways growth and progress. The Indian Railways (IP) network is one of the largest in the world with 63,000 kms of track and employing 1.6 million people. Operating on three gauges board gauge (1676 mm), meter gauge (1000 mm) and narrow gauge (762 mm), Railways move 12 million passengers and over 1 million tonnes of freight traffic daily. Nearly, 60% of freight and 48% of passenger traffic is presently hauled on electric traction.

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The rail network is divided into nine operating zones (based on geographical regions) and various production units, including:

Rail Coach Factory Kapurthala; Diesel Loco Works Varanasi; Integral Coach Factory Chennai; and Wheel & Axle Plant Bangalore.

In addition to the above four manufacturing / production units, Indian Railways also have a number of other important elements to its structure, as follows:

IRCON responsible for IR construction and civil engineering; RITES IRs consultancy division; Research, Designs and Standards Organization (RDSO) IRs research and development division and also the approval body for new technology / products. Central Organization for Rail Electrification (CORE) Overseas major rail electrification projects.

Indian Railways has a large number of projects in the pipeline but progress is slow due to resource constraints. The Govt. has d network called the National Rail Vikas Yojana (NRVY). The Plan was launched in August 2002 and involves an estimated investment of Rs.15000 r over the next five years and comprises three main elements. There are also ongoing projects to improve suburban metro system in Calcutta, Chennai, and Mumbai. There are being taken forward by separate mass transit organizations. In Delhi construction work is underway for a new metro system. Drawn up a development plan to improve and enhance capacity across the centres of the country.

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ROADWAYS

Industrialisation of the country has induced a traffic growth of 8-12 percent per year on many sections of National Highways and this growth trend is expected to continue. While the traffic on National Highways has been growing at a rapid pace, it has not been possible for the Government to provide matching funds due to competing demand from other priority sectors. This has led to a large number of deficiencies in the network. Many sections of the NHs are in need of capacity augmentation by way of widening grade separation construction of bypasses bridges and expressways etc. Many bridges are in need of replacement. The traffic movement on NHs is also hindered due to a large number of Rail-Road crossings where road traffic has to per force stop due to the frequent closures. The overall scenario on the highways has led to economic losses by way of longer turnaround time for the vehicle fleeting rising vehicle operating costs and dissipation of human energy in the driving. This calls for urgent remedial measures. To motivate the inflow of resources for the development, maintenance and management of NHs and to improve their efficiency, productivity and quality of service and to bring in competitiveness in providing highway services to road users. The Government of India in consonance with its general policy of liberalisation/globalisation of Country's economy welcomes private investment in National Highways and hopes that this measure would help in improvements of the existing highways and bring in the latest technology and improvements of the existing highways and bring in the latest technology and improved management techniques. The users are already accustomed to pay fee for use of bridges on National Highways for the last two decades.
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Other highway projects have also been awarded to private sector recently and the experience gained in the process has been utilised in framing these guidelines. India has a vast network of National Highways (NHs) totalling to 34,298 km connecting important towns cities, ports and industrial centres. (A) Existing Network The deficiencies in the existing National Highways network (as on 1.4.06) and estimated cost of their removal are as given below. These works are required to be completed within a period of 10-15 years. S.No. Category of Work Widening of single lane to two lanes including strengthening of pavement Widening of 2 lanes roads (4 lane or wider) Strengthening of pavement (2 lane equivalent) and construction of paved shoulders Construction of bypasses Construction of Bridges Miscellaneous & Road Safety Works Estimated Length/No. Cost (1.4.06 prices) 5200 km 14.000 km 5200 Cr. 42.000 Cr.

1 2

3 4 5 6

15.000 km 40 No. 470 L.S. Total

9.000 Cr. 2.000 Cr. 1.000 Cr. 5.000 Cr. 64,2000 Cr.

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(B) Expressways Construction of Expressways on new Alignments Total (A) + (B) 2000 km Say : 16,000 Cr 80,200 Cr. 80,000 Cr.

Categories of projects identified for private investment are given in the following table: S.No. Category of projects Existing Network 1 Widening from 2 lanes to 4 lanes 2 Major Bridges 3 Railway Over Bridges 4 Elevated section through Urban Areas 5 Interchanges 6 Bypasses New Network 7 Expressways Indicative Quantum 4000 km 50 No. 50 No. To be identified To be identified 30 No. 1000 km.

Roadways network India has one of the largest road networks in the world (over 2.9 million km at present). For the purpose of management and administration, roads in India are divided into the following five categories:

National Highways (NH) State Highways (SH) Major District Roads (MDR) Other District Roads (ODR) Village Roads (VR)

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The National Highways are intended to facilitate medium and long distance inter-city passenger and freight traffic across the country. The State highways are supposed to carry the traffic along major centres within the State. Other District Roads and Village Roads provide villages accessibility to meet their social needs and also the means to transport agriculture produce from village to nearby markets. Major District Roads provide the secondary function of linkage between main roads and rural roads. PROJECTS ON OTHER NATIONAL HIGHWAYS PROJECT NAME (US$ MILLION) DETAILS ESTD. COST A- FOUR LANING OF EXISTING NHS: DELHI-GURGAON (NH-8) 22 KM 22 JAIPUR-AJMER (NH-8) 147 KM 147 GAPS BETWEEN THE 180 KM 180 MUMBAI-OUNE SECTION 30 KM 30 BAGLAORE-NELLORE 50 KM 50 CHILAKALURIPET (NH-5) 350 KM 350 HOSUR-KRISHNAGIRI (NH- 60 KM 60 45) CHENGELPET48 KM 48 YELLUPURAM (NH-45) LINKAGES TO PORTS 100 KM 100 TOTAL 1,292 KM 1,292 B- BRIDGES & BYPASSES 55 NOS. 489

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AVIATION

The Airport Authority of India (AAI) manages total 120 Airports in the country, which include 5 International Airport, 87 domestic airports and 28 civil enclaves. Top 5 airports in the country handle 70% of the passenger traffic out of which Delhi and Mumbai together alone accounts for 50% traffic. Passenger and cargo traffic has growth at an average of about 9% over the last 10 years. It is estimated that the domestic passenger segment is likely to grow at 12% per annum. Anticipated growth for International passenger segment is 7% while the growth for International Cargo is likely to grow at a healthy rate of 12%. Privatization of International Airports is in offing through Joint Venture route. Three Greenfield airports are getting developed at Kochi, Hyderabad and Bangalore with major shareholding of private sector. The work on Bangalore airport is likely to commence shortly. Few selected non-metro airports are likely to be privatized.100% foreign equity has also been allowed in construction and maintenance of airports with selective approval from Foreign Investment Promotion Board.

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The international and domestic aircraft movements increased by 15.4 percent each during the period under review. The reason for increase in aircraft movements is due to increase of operation of smaller aircraft by airlines and the introduction of new airlines viz., Air Deccan in southern region and international airlines (Air Canada, Polar Air Cargo, Qatar Airways (Freighter), Turkish Airways, Air Slovakia at IGI Airport with effect from October 2008. International and Domestic passenger traffic handled in October 2003 has increased by 15.4 percent and 6.7 percent over the period of October 2002 leading to an overall increase of 9.4 percent. The total passenger increased by 9.2 percent, 7.6 percent, 8.9 percent and 17.0 percent respectively at five international airports six developing international airports, eight custom airports and 26 Domestic airports. The total cargo traffic handled in October 2008 has shown an increase of 3.5 percent as compared to the cargo handled in October 202. The international and domestic cargo traffic increased by 4.3 percent and 2.1 percent respectively during the period During the month of October 2008, 5346 thousand aircraft movements (excludes defence & other non-commercial movements), 40.33 lakh passengers and 88.59 thousand tonnes of cargo were handled at all the airports taken together.

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PORTS The lion coastline of India is dotted with 11 major ports which are managed by the Port Trust of India under Central Government jurisdiction and 139 minor operable ports under the jurisdiction of the respective State Governments. The major ports are located at Calcutta/Haldia, Mumbai, and Jawaharlal Nehru Port at Nhava Sheva, Chennai, Cochin, Vishakhapatnam, Kandla, Mormugao, Paradip, New Mangalore, and Tuticorin. The major ports handle 90 per cent of the all- India port throughput, and thus bear the brunt of sea borne trade. Ports & Shipping There are eleven major ports and 148 minor ports in India. The responsibility for development and management of major ports rests with respective Port Trusts under the Central Government. The state government administers the minor ports. Major ports handled approximately 82 percent of the All-India ports was about 8 percent more than the traffic handled in 1998-99. The average turnaround time and output per ship-berth-day at major ports have shown improvement during 1999-00 as compared to the previous year. Shipping Companies have been allowed to retain sale proceeds of their ships abroad and utilize them for fresh acquisition; The Shipping Companies are now permitted to get their ships repaired in any shipyard without seeking prior approval from the Government; Quarterly Block Allocation scheme for repair of ships has been dispensed with; Reserve Bank of India releases foreign exchange for ship repair/dry docking and spares for imported capital goods, without any value limit;
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Freedom to Time Charter out ships by Indian shipping Companies; 100 percent investment by NRIs in shipping with full repatriation benefits; Automatic approval for foreign direct investment up to 74% in shipping; Facilities at par with 100 percent EOUs for ship repairs industry; Freight charges on account of movement of fertilizers and petroleum products are allowed to be paid in convertible currency; No permission is required for raising foreign exchange loans from abroad by mortgaging the vessels with the lender; Action has since been initiated to formulate a National Shipping Policy to provide fiscal, financial, administrative and legislative measures for growth and development of shipping in India.

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Telecom

The Government of India (Government) recognizes that provision of world class telecommunications infrastructure and information is the key to rapid economic and social development of the country. It is critical not only for the development of the Information Technology industry, but also has widespread ramifications on the entire economy of the country. It is also anticipated that going forward, a major part of the GDP of the country would be contributed by this sector. Accordingly, it is of vital importance to the country that there be a comprehensive and forward looking telecommunications policy which creates an enabling framework for development of this industry. NTP 1994 - Objectives and Achievements In 1994, the Government announced the National Telecom Policy which defined certain important objectives, including availability of telephone on demand, provision of world class services at reasonable prices, ensuring Indias emergence as major manufacturing / export base of telecom equipment and universal availability of basic telecom services to all villages. It also announced a series of specific targets to be achieved by 1997. As against the NTP 1994 target of provision of 1 PCO per 500 urban population and coverage of all 6 lac villages, DoT has achieved an urban PCO penetration of 1 PCO per 522 and has been able to provide telephone coverage to only 3.1 lac villages. As regards provision of total telephone lines in the country, DoT has provided 8.73 million telephone lines against the eighth plan target of 7.5 million lines.

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NTP 1994 also recognized that the required resources for achieving these targets would not be available only out of Government sources and concluded that private investment and involvement of the private sector was required to bridge the resource gap. The Government invited private sector participation in a phased manner from the early nineties, initially for value added services such as Paging Services and Cellular Mobile Telephone Services (CMTS) and thereafter for Fixed Telephone Services (FTS). After a competitive bidding process, licenses were awarded to 8 CMTS operators in the four metros, 14 CMTS operators in 18 state circles, 6 BTS operators in 6 state circles and to paging operators in 27 cities and 18 state circles. VSAT services were liberalised for providing data services to closed user groups. Licences were issued to 14 operators in the private sector out of which only nine licences are operational. The Government has recently Announced the policy for Internet Service Provision (ISP) by private operators and has commenced licensing of the same. The Government has also announced opening up of Global Mobile Personal Communications by S GMPCS operators is under consideration. The Government recognises that the result of the privatisation has so far not been entirely satisfactory. While there has been a rapid rollout of cellular mobile networks in the metros and states with currently over 1 million subscribers, most of the projects today are facing problems. The main reason, according to the cellular and basic operators, has been the fact that the actual revenues realised by these projects have been far short of the projections and the operators are unable to arrange financing for their projects and therefore complete their projects. Basic telecom services by private operators have only just commenced in a limited way in two of the six circles where licenses were awarded. As a result, some of the targets as envisaged in the objectives of the NTP 1994 have remained unfulfilled. The private sector entry has been slower than what was envisaged in the NTP 1994.
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The government views the above developments with concern as it would adversely affect the further development of the sector and recognises the need to take a fresh look at the policy framework for this sector. Need for a New Telecom Policy In addition to some of the objectives of NTP 1994 not being fulfilled, there have also been far reaching developments in the recent past in the telecom, IT, consumer electronics and media industries world-wide. Convergence of both markets and technologies is a reality that is forcing realignment of the industry. At one level, telephone and broadcasting industries are entering each others markets, while at another level; technology is blurring the difference between different conduit systems such as wire line and wireless. As in the case of most countries, separate licences have been issued in our country for basic, cellular, ISP, satellite and cable TV operators each with separate industry structure, terms of entry and varying requirement to create infrastructure. However this convergence now allows operators to use their facilities to deliver some services reserved for other operators, necessitating a relook into the existing policy framework. The new telecom policy framework is also required to facilitate Indias vision of becoming an IT superpower and develop a world class telecom infrastructure in the country. Satellite (GMPCS) and has issued one provisional license. Issue of licenses to other prospective

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OBJECTIVES OF NEW TELECOM POLICY The objectives of the NTP 1999 would are as under:

Access to telecommunications is of utmost importance for achievement of the country's social and economic goals. Availability of affordable and effective communications for the citizens is at the core of the vision and goal of the telecom policy. Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas, and the provision of high-level services capable of meeting the needs of the countrys economy; Create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics and thereby propel India into becoming an IT superpower; Convert PCOs, wherever justified, into Public Tele-info centres having multimedia capability like ISDN services, remote database access, government and community information systems etc. Transform in a time bound manner, the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players; Strengthen research and development efforts in the country and provide an impetus to build world-class manufacturing capabilities. Achieve efficiency and transparency in spectrum management

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Protect the defence & security interests of the country. Enable Indian Telecom Companies to become truly global players. In line with the above objectives, the specific targets that the NTP 1999 seeks to achieve would be: Make available telephone on demand by the year 2002 and sustain it thereafter so as to achieve a tele-density of 7 by the year 2005 and 15 by the year 2010

Encourage development of telecom in rural areas making it more affordable by suitable tariff structure and making rural communication mandatory for all fixed service providers Increase rural tele-density from the current level of 0.4 to 4 by the year 2010 and provide reliable transmission media in all rural areas Achieve telecom coverage of all villages in the country and provide reliable media to all exchanges by the year 2002 Provide Internet access to all district head quarters by the year 2000 Provide high speed data and multimedia capability using technologies including ISDN to all towns with a population greater than 2 lac by the year 2002.

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BIOTECHNOLOGY

The alignment of a vast pool of scientific talent, a world-class information technology industry, and a vibrant generic pharmaceutical sector poses India to emerge as a significant spot on the global biotech map. There are about 170 biotech-based companies in India. Out of these, 60 are in the modern biotech sector. India holds a good advantage over many other countries of the world. With its large population of over a billion people there is a huge market for products and services. Indias population has a very interesting environment for biotech companies to shift bases here. Even thought in the global biotech market, Indian share is presently just about 2% the future seems very bright for the country. Biotechnology is a fast emerging sector in India. The consumption of biotech products in India was $1789 Mn during 1999, which is expected to grow up to the tune of $4270 Mn by the end of the year 2010. Biotech industry in India at present is at the threshold of tremendous growth. For example, in the human and animal products segment of the industry alone, the vaccine market alone is valued at US$ 230 million and is growing at 20%. The investment opportunities in India are very promising. Fresh investments of 145 Mn hold the potential of creating a turnover of Rs.200mn. In the next 5 to 7 years, which could then further be utilized to innovate new products for the global biotech market?
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The government on its part has been increasing the outlays for biotechnology over the past decade. The budgetary allocation have gone up by a tremendous amount from just 404 million in 1987-88 to 1138 million in 1997-98 and to almost double the amount of a whopping 2356 million in 2002-03. Crop Biotechnology: Successful transgenic research has been carried out on banana, cabbage, mustard, mungbean and wheat for crop improvement, increased nutritional value, disease resistance, and better shelf life, particularly in cotton and rice. Transgenic systems of indica rice and wheat have been developed; rice transformed with 3 genes and wheat with one gene to confer stress resistance. India is now a partner I the International Rice Genome Programme with the responsibility to sequence a part of Chromosome 11. Bt. Cotton trials at several locations have been monitored. The date indicates that Bt. Cotton has an average yield advantage of around 4.0 times over non-Bt. Cotton. No effects of Bt. Protein have been noticed on non-target and beneficial insects. Plant Tissue Culture: Protocol standardization has been completed for a number of spices of forest trees horticulture and plantation crops. Different crosses have been developed in a variety of orchids. Fields demonstration trials are being conducted for tissue culture raised coffee, pepper and tea. Complete regeneration systems are now available for 20 different species. Transformation systems have been developed for Populous Species. Polymerase chain Reaction (PCR) based molecular diagnostic h\kit has been perfected for the detection of Banana Bunchy Top virus.

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ENGINEERING INDUSTRY

HEAVY INDUSTRY Heavy Engineering Industry is one of the largest segments of Industrial production. It occupies a whole range of industries such as Heavy Electricity Machinery. Turbines, Generators, Transformers, Switchgears, Textile Machinery etc. The Index of Industrial Production figures of 8 of the 16 major industry groups show substantial growth with the rates ranging from 6% to 28%. Thought there was some signs of recovery in the third quarter of 2002-2003 the stimuli seem to have dissipated quickly. The problem with the cotton textile sector has also continued to perform badly in the last two years. The only positive development is the measures announced for the textile industry in the recent budget. Trends across major sectors show that growth in the two lead sectors-capital goods and consumer non-durable goods-have decelerated but still remain at the double-digit levels. This has,
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however, been compensated by the strong recovery in the intermediate goods segment. A major concern is the lacklustre performance of the consumer durable goods segment over the last year with production declining for the first time since themednineties.

ELECRICAL INDUSTRY In India, the entire range of circuit breakers from bulk oil, minimum oil, air blast, vacuum to SF6 are manufacture to standard specification for the benefit of customers. The range of products produced cover the entire voltage range for 240 V to 420 V. Switchgear and control gear, MCBs, air circuit breakers, switches, rewireable fuses and HRC fuses with their respective fuse bases, holders and starters are being produced to customer ' specifications as well s to standard specifications. Motor control systems based on microprocessor and computer control are also available for power stations, load dispatch centres, major receiving centres and industrial complexes MACHINE TOOLS INDUSTRY Tools Industry is the backbone of the entire industrial engineering sector, is today in a position to export general purpose and a standard machine tool to even industrially advanced countries. During the last four decades, the machine tool industry in India has established a sound base and there are around 125 machine tool manufactures in the organized sector as also around 300 units in the small ancillary sector. MINING EQUIPMENTS The major mining equipment are Long wall Mining Equipment, Road Header, side Discharge Loader (SDL), Haulage Winder, Ventilation Fan, Load Haul dumper (LHD), Coal Cutter, Conveyors Battery Loco, Pumps, friction Prop. Etc, at present there are 32 manufactures in the organized sector both in public and private
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sector for underground and surface mining equipment of various types. Out of these 17 units manufacture underground mining equipment. The production for 2000-2001 & 2001-2002 was Rs. 149.52 crore and Rs. 238.86 crore respectively. The vast majority of mining equipment requirement f the mining industry is being met by the indigenous manufactures of the equipment. In case of some highly sophisticated equipment, critical parts are imported. The orts and exports of mining machinery during 2001-2002 were Rs. 28.93 crore and Rs. 11 lakhs respectively. HEAVY ELECTRICAL INDUSTRY Among the Third World countries, India is major exporter of heavy and light engineering goods, producing a wide range of items. The country also makes construction machinery, equipment for irrigation projects, diesel engines, tractors, and transport vechicles, cotton textile and sugar mill machinery. The heavy electrical industry meets the entire domestic demand. Electrical equipment such as motors, transformers, switchgears etc, is issued by all sectors of the Indian Economy. Some major areas where these are used are the multicrore projections for power generation including nuclear power stations, petrochemical complexes, and chemical plants integrated steel plants, non-ferrous metal units etc. The existing installed capacity in the industry is of the order of 4500 MW of thermal, 1345 MW of Hydro and about 100 MW of gas based power generation equipment per annum. The Heavy Electrical Industry is capable of manufacturing transmission and distribution equipment upto400 KV AC and high voltage DC. The domestic Heavy Electrical equipment manufacturers are making with respect to product designs and upgrading of manufacturing & testing facilities. The Capacity established for manufacture of various kinds of turbines such as steam & hydro turbines including industrial turbines
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is more than 7000 MW per annum. The range of BHEL includes steam turbines up to 500 MW unit rating, which they are planning to enhance up to 600 MW. They have capability to manufacture Gas Turbines up to 255 MW (ISO) rating BHEL is the largest engineering and manufacturing enterprise in India in the energy related/infrastructure sector today It has been earning profits continually since 1971-72 and paying dividends since 1976-77. BHEL manufactures over 180 products under 30major product groups and caters to core sectors of the Indian Economy viz. Power generation & transmission, industry transportation, telecommunication, renewable energy etc. PETROLEUM INDUSTRY The petroleum industry in India is undergoing a major change. In accordance with the ongoing process of labialisation, the industry has been thrown open for private sector in all the major areas of exploration, production, refining and marketing, resulting in increased demand for the oil field and related equipment. The users are ONGC, Oil India Ltd. on charter - hire basis. Domestic manufactures are manufacturing drilling rigs for on-shore drilling. For Offshore drilling like jack-up rigs etc are not being manufactured indigenously. However, offshore platform and some other technological structures are being produced locally. The major producers are BHEL, Hindustan Shipyard, Mazagon Dock and Burn & company Limited. SUGAR INDUSTRY Domestic manufactures of sugar machinery occupy a predominant position in the global scenario. They are capable of manufacturing sugar plants of latest design for a capacity up to 10,000 TCD. There are presently 27 units in the organized sector for the manufacture of
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complete sugar plants and components with a current level of production value of Rs. 136.87 crores against installed capacity of Rs. 200 crores. The range of equipment includes cane handling and milling plants. Evaporator, Bagasse Drying plants, Centrifugals, Weighing and Bagging Machine etc. besides complete sugar plants. TEXTILE INDUSTRY Indian Textile Machinery Manufactures are manufacturing textile machinery required for sorting, cording and processing of yarns/fabrics and weaving along-with the components, spares and accessories. The industry has developed over the last five decades and ins one of the oldest industries catering to the needs of textile sector. The Textile Machinery Industry are endeavouring to upgrade the production of sophisticated machines so as to cater to the needs of garments and weaving sector.

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FILM INDUSTRY In 2001, film was accorded industry status by the Indian Government this making it eligible for film financing from banks and financial institutions while the Industrial Development Bank of India (IDBI) set up the countrys first film fund worth 100 crores. Cable television is the largest revenue earner with television broadcasting in second place and film third, followed closely by television production. The future primary drivers for the entertainment industry will be growth in GDP, changes in demographic and the adoption of digital technology by the industry. Negative Fallout: No excise duty on CD ROMs, but excise duty is levied on the audio CDs and video CDs although the manufacturing process, requirement of raw material and plant requirement for three types is the same. On top of it, a 4% excise duty as been imposed on MRP with regard to audiocassettes. No abatement has been offered with respect to this service tax on broadcast services. In the entertainment segment, the films sector has been given the Industry status by the government. Estimates show that the entertainment industry is currently generating revenue of Rs. 100 billion and this will be able to increase by Rs. 315 billion by the year 2005. These measures include allowing listing to a company with 10% public ownership skin to the information technology industry. The FM radio broadcasting has been privatized. The current size of film segment, according to the latest estimate, is worth Rs. 22 billion. The average growth budget for the films has been increasing by 15% per annum. Another high growth segment of the entertainment industry is the television broadcasting. The present size of this segment is estimated to be Rs. 35 billion.
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The subscription revenues of the television channels are estimated to be around Rs. 25 billion currently. There are thirty five million households having access to about seventy channels the cable networks. The penetration of cable TV, particularly in the rural segment is expected to grow by 12% in the coming years. The music industry is dominated by MC sales rather than CDs. The music industry in India is expected grow rate of 18-20% in the coming years.

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Health industry

In the Health Care segment public spending on health (less than 1 percent of GDP) places India stagnant among the bottom 20 percent of countries. Most low-income countries spend more than India, where current levels are far below what is needed to provide basic health care to the population. The bulk of public spending on primary health care has been spread too thinly to be fully effective, while the referral linkages to secondary care have been suffered. As in other countries, preventive health services take a back seat to curative care. Over the last five decades, India has built up a vast health infrastructure and manpower at primary, secondary and tertiary care in government, voluntary and private sectors. These institutions are manned by professionals and para-professionals trained in the medical colleges. Currently, private sector health services range from those provided by large corporate hospitals, smaller hospitals / b\nursing homes to clinics / dispensaries run by qualified personnel. As on June 2001, there were 181 medical colleges out of which 155 (46 of them private) were recognized and 26 (19 of then private) were permitted under the section 10A of the Indian Medical Council Act. A total 5,39,00 MBBS doctors were registered with the Medical council number of Physicians and specialists available is more than
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the estimated requirements. The current doctor population ratio is 1:1800. Tertiary hospitals in major cities are in many cases, run by business houses and use corporate business strategies and hi-tech specialization to create demand and attract those with effective demand or the critically vulnerable at increasing costs. Standards in some of them are truly world class and some who work there are outstanding leaders in their areas. Public health spending accounts for 25% of aggregate expenditure, the balance being out of pocket expenditure incurred by patients to private practitioners of various hues.

Public spending on health in India has itself declined after liberalization from 1.3% of GDP in 1990 to 0.9% in 1999. Consider the contrast with the Bhore Committee recommendation of 15% committed to health from the revenue expenditure budget, against the WHO, which recommended 55% of GDP for health. The current annual per capita public health expenditure is no more than Rs. 160and a recent World Bank review showed that over all primary health services account for 58% f public expenditure mostly but on salaries, and the secondary/tertiary sector for about 38%, perhaps the greater part going to tertiary sector, including government funded medical education.

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AN OVERLOOK
The Indian economy is booming, with rates of gross domestic product growth exceeding 8% every year since 2003/04. This ongoing growth is due to rapidly developing services and manufacturing sectors, increasing consumer demand (largely driven by increased spending by Indias middle class) and government commitments to rejuvenate the agricultural sector and improve the economic conditions of Indias rural population. Construction is the second largest economic activity in India after agriculture, and has been growing rapidly. The production of industrial machinery has also been on the rise and the increasing flow of goods has spurred increases in rail, road and port traffic, necessitating further infrastructure

Improvements
In the fiscal year ending March 2008, Indias GDP grew by more than 9%. This robust rate of expansion was initially forecast to continue in the 2008-2009 fiscal year. In summer 2008, however the combined impact of slowing Indian consumption, a higher domestic cost of capital and reduced capital access from international capital markets raised concerns by some analysts that the rate of growth might be slowing. In October 2008, Indias Prime Minister, Mr. Manmohan Singh, affirmed the Governments view that a rate of growth of 7-7.5% remains realistic, even given the global credit crunch, and assured observers that the countrys Government will take action if necessary to support businesses and the financial markets. Mr. Singh has also singled out infrastructure investment as particularly vital. Indeed, even with a somewhat slower rate of growth, the Indian economy is still expanding significantly, and substantial investment in
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infrastructure continues to be required in order to sustain Indias economic progress. The countrys capacity to absorb and benefit from new technology and industries depends on the availability, quality and efficiency of more basic forms of infrastructure including energy, water and land transportation. In some areas, roads, rail lines, ports and airports are already operating at capacity, so expansion is a necessary prerequisite to further economic growth. The Indian Government recognises this imperative. As per the Eleventh Five Year Plan, more than US$500 billion worth of investment is planned to flow into Indias infrastructure by 2012. Construction projects account for a substantial portion of the proposed investments, making the E&C sector one of the biggest beneficiaries of the infrastructure boom in India. The regulatory environment is relaxing to encourage further foreign direct investment (FDI). Private sector participation is integral to these plans. PPPs have been identified as the most suitable mode for the implementation of projects and indeed, are rapidly becoming the funding norm. Their share of the total planned infrastructure improvements is projected to be around 30% (US$150 billion). Powerand road projects top the list, and other transportation sectors such as railways, ports, and airports are also targeted for major investments. Companies looking to capitalise on the situation need to plan their strategy for entering the market carefully. Understanding the local market, including selecting complementary local partners, is vital. Tax optimisation is a key cost component while substantial tax benefits are provided for infrastructure projects, developers need to be savvy about structuring their contracts. Good tax planning can have a potentially decisive impact, especially in bidding situations, and help to avoid unnecessary litigation later.
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