Simplified regulations and risk reduction measures are required to revive India’s flagging infrastructure sector

Last June, India’s prime minister, Manmohan Singh, called a meeting to discuss the status of the country’s infrastructure sector. According to finance ministry officials, a series of road, rail and power projects with a total value of more than US$27 billion were delayed. A month later, two consecutive power outages crippled northern and eastern India, affecting 600 million people and bringing the nation to a virtual standstill. The blackout, hailed as one of the biggest power failures in the world, once again placed the dismal state of India’s infrastructure in the international spotlight.

In October, Singh’s coalition government was finally goaded into action. It announced a slew of big-ticket reforms – the most extensive in two decades – with the objective of revving up the economy, which was growing at its slowest pace for three years. Divesting stakes in state-run companies, opening up aviation and front-end retail to foreign investors and raising diesel prices were a few of the headline reforms aimed at stimulating investment and easing the fiscal deficit.

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