India at 75: How strong infrastructure holds the key to unlock bight future

Ambitious plans like the bullet train, 5G telecom network, and several more will be instrumental in shaping a better future, covering a major portion of the population

The Chenab rail bridge, which is nearly complete in Jammu and Kashmir, is the most picturesque symbol of what Indian infrastructure has scaled. This month, when the overarch deck of the bridge will be completed with a golden joint, it will become the world’s highest single-arch railway bridge. Train journeys would begin early next year.

Like the bridge, some of the most spectacular achievements of the Indian infrastructure are about to hit commercial runs soon after Indians celebrate the 75th year of their independence. The farthest plan is the bullet train, projected to run between Mumbai and Ahmedabad covering a distance of 508 kms and 12 Stations in less than two hours. The project had crawled over the past three years and is now slated to be completed by 2026.

Among infrastructure projects, the vast expansion of the road network from 2001-02 has been the oldest theme. It began with the Golden Quadrilateral and soon encased the Pradhan Mantri Gram Sadak Yojana to offer a mobility alternative to the rural population they never had. It has spurred the consistent demand for steel and cement for decades, which is intensifying with the bouquets of Expressways it is offering at a rapid clip.

Yet, the more significant plan for the infrastructure space shall be the rollout of the 5G telecom network. The auctions held over July and August this year demonstrate the interest level among the telecom service providers. The entry of the Adani group in the mix shows the sector is in for another round of furious expansion, which could mirror the developments of the 90s. By any reckoning, this will be one of the most significant changes for the economy. The impact of the 5G rollout will be graded over the years. In FY23 there shall be announcements, possibly led by Prime Minister Narendra Modi in his Independence Day speech. The actual rollout on a substantive basis will happen from FY24.

Potentially, the most dramatic impact of the 5G will be on the education and the health sector. Value addition in these sectors is very low for a large segment of the Indian population. The cost of accessing tears away a large chunk of their income as all government consumption surveys show. Education accounts for a fourth of the household budget for most deciles. Health expenditure can be far more disastrous when it strikes.

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In most states education has been pushed to the sidelines of government focus. In states like Delhi, where education budgets have been raised massively, CAG data shows 20 per cent of it remained unspent. The accent in many states is on recruiting contract teachers but with little measures written in to improve their performance.

Similarly, in health, a series of audits of district hospitals show that in all North Indian states it is not the lack of money but the wastage of funds which is to be blamed. Even in a fiscally sharp state like Odisha, spending on critical healthcare projects did not happen. India has achieved universal enrollment but the educational results are one of the lowest in the world as the Pisa reports show. Malnutrition is prevalent among a third of Indian children. This means the infrastructure achievements of this decade have to be substantially worked in a different way.

It will be necessary, therefore for the hard infrastructure developments to positively impact these weaknesses of the soft infrastructure outcomes. The infra deficit was so high till recently that additional spending was just about filling in the gaps. For the first time, it is possible to envisage an infra framework that can create a surplus of assets, which in turn can push productivity.

But to take advantage of the possible rise in productivity, it is necessary to offer higher education and better health outcomes.

Only when a large percentage of the Indian population achieved the health and education benefits can the next stage of the skilling revolution be unlocked. Skilling as of now is only happening in pilot-scale projects. Skilling must be expanded as a country-wide project like it was done for the Jan Dhan Yojana, where the incentives for all concerned were aligned. Skilling needs an alignment of market forces. Without that the gap between India where only seven per cent population is skilled versus economies like Germany where 70 per cent of people are skilled, shall be impossible to bridge.

For instance, drone technology is being rapidly adopted in India. But the weak educational achievements make it difficult for a large percentage of the young population to aspire for it. They are also therefore unable to take advantage of the subsequent skilling opportunities to integrate themselves into the sector.

This is where the infrastructure bridge being created will have to connect with the huge underbelly of low-income attainments of a large segment of the population. In this context, the Chenab bridge meeting the seemingly impossible odds is most appropriate.