Deepak Parekh Committee Infrastructure Report: Building On Reforms
Deepak Parekh Committee Infrastructure Report: Building On Reforms
The Deepak Parekh Committee on Infrastructure is to submit its final report in November, 2014. The interim report of the committee has been submitted to the PM. According to the committee's interim report, around 15% of the power generation capability of Central PSUs will be delineated for open access customers. Through this means, competition will be induced leading to high private investment in power generation. Producers will now be able to sell power directly to bulk consumers in a market where competition pervades, according to media reports. While open access was part of the Electricity Act, 2004, this has not come of age yet as power producers have not looked beyond state PSUs.
On the tariff front, the committee's interim report has suggested that there should be rationalisation of consumer tariffs which should then be graded as per the paying capability of buyers. Market based pricing should be gradually introduced for high income households as well as commercial consumers and industries, the report also says. The HDFC Bank Chairman led committee also provided detailed plans for infrastructure sectors with special emphasis on Indian railways.
The report entitled “Financing of Infrastructure” has also made provisions for regulatory reforms through legislative measures. The committee says reforms are critical for future investments in the infrastructure sector. Without these reforms, the existing investments will also be threatened, says the committee. Some of the most important highlights of this report are as follows:
Regulatory structure should be more responsive to investment along with the needs of the sector. The panel has also suggested the PPP model as the best bet for the achievement of target levels of investment. A time bound programme for implementation of the recommendations are needed to provide an environment which is conducive to the development of the private sector in this context.
An investment of INR 51.46 lakh crore has been projected in the 12th Plan. In the 11th Plan, the committee report indicates private sector share to be 37% as against 10% in the 12th Plan. The committee has also proposed the pricing of commodities and services especially energy to be sustainable. Privatisation of state owned monopolies has also been suggested by the committee.
The committee is also proposing to clear what it terms as delays in environmental clearances and land acquisition. Sustainable development is all about using responsible business practices to promote a better environment for growth and ecological conservation. It's a win-win method of development. Environmental conservation is as important as infrastructure development for the sustained welfare of humanity. Hopefully, this will be taken into consideration before major decisions pertaining to infrastructure policy are taken and implemented.
