During my opening remarks at our recently concluded 3rd Infrastructure Today International Conference, as I pondered over the definition of infrastructure, I recalled Feedback Ventures' Vinayak Chatterjee's comments, at the Planning Commission's infrastructure conference, a week ago. He said that there are more than 10 definitions of 'infrastructure' as defined by RBI, Income Tax and other such bodies. This means that while the planning commission considers healthcare and education as part of infrastructure, banking guidelines baulk at projects from these sectors. Montek Singh and Pronab Mukherjee nodded in agreement that this needs streamlining; hopefully we are likely to see this issue being resolved by the next budget. This will greatly help companies seeking incentives and tax breaks to plan for their future as they weather long gestation projects. The budget, however, has pulled the MAT (pun intended!) from under their feet by taxing them at 18 per cent, thereby withdrawing the incentive which made this sector competitive. FM needs to rethink this disincentive as getting the private sector to invest is crucial in keeping up the energy in the infra investment pipeline.
Reliance Infra has paid MSRDC and signed up for extending the Bandra-Worli Sealink right upto Nariman Point in Mumbai at Rs 1,600-crore-odd as Maharashtra exposed a huge debt of Rs 185,000 crore in its annual budget. The pattern of fund allocation clearly indicates that the state is highly dependent on the Centre when it comes to spending for urban infrastructure, while the state focuses on rural areas. As per the CSO survey of performance of GDP in last 5 years, Gujarat is on top and Madhya Pradesh at the bottom. But many will be astonished to know that Bihar has skyrocketed to share the lead with Gujarat, with Kerala close behind in third position. Needless to say, Maharashtra is nowhere in the reckoning.
Maharashtra's dependence on the Centre for funds for its BRIMSTOWAD project shows that it is incapable of cementing the critical chinks in its armour. Once the project is completed by 2011, Mumbai city will be able to handle 50 mm of rainfall an hour and not be paralysed as is now the case each time there is a heavy downpour. The deluge of 26/7 is as much of a blot on the city as the bloody 26/11 attack and if funds for this Rs 1,300 crore project have to wait for the Centre's nod, then Mumbai is being run by the CEOs in Delhi.
The state has a clear opportunity to clear its debt and generate enough funds for its development projects by leveraging the Dharavi project. Builder consortiums are ready to bid and the project has a potential of raising Rs 100,000 crore for the state government. In fact this can be one of the largest PPP projects in the world. But negotiations are going on forever and investors' patience is wearing thin.
If only Maharashtra could act, the slumdog story could well be rewritten under the glorious Dharavi skyline, only this time, instead of Danny Boyle counting the moolah, the state could wash off the colossal debt and have enough funds to make Mumbai the super city it deserves to be.