labels: industry - general, economy - general, infrastructure - general
States to create industry-friendly environment news
04 August 2006

Chennai: "The state governments must create an enabling environment for the success of the public private partnership (PPP) projects with transparent, regulatory and legal frameworks. Since, infrastructure projects have long gestation periods, the governments must take steps to understand the risk perception of the investors and provide standard treatment to all PPP projects," said S Jaipal Reddy, Union Minister for Urban Development and Poverty Alleviation.

Inaugurating the fourth infrastructure summit of Confederation of Indian Industry (CII), Suminfra 2006, in Chennai, Reddy said that successful PPP projects not only attract foreign investment but also introduce new efficiency into the system.

According to him the central government will invest Rs50,000 crore in the next six years in various urban development projects in partnership with state urban local bodies. The latter would be encouraged to raise an equivalent amount for additional funding. The government of India is also keen on extending the viability gap funding of upto 20 per cent of the total cost of the major infrastructure projects such as metro rail projects.

Delivering the keynote address, Dr Y S Rajasekhara Reddy, chief minister of Andhra Pradesh said, infrastructure development must be integrated with social development. He said, Andhra Pradesh has already invested over Rs9,900 crore in the last two years and created the irrigation potential of over 515,000 acre.

In 2006-07 alone, the government was investing over Rs10,000 crore to create additional irrigation to irrigate 750,000 acres, disclosed Reddy, adding, "The government is planning major housing initiatives with the aim to provide houses for all in the state within the next three years."

According to him despite giving free power to over 22 lakh farmers, the state's power utilities have won the highest Crisil rating. The utilities are able to perform well as they are constantly bringing down the transmission and distribution losses, which are now less than 20 per cent at present.

"The government is also upgrading the infrastructure of the power generation and distribution facilities. The state has brought down the industrial power tariff by 4 per cent in recent years and has not so far increased the tariff for domestic use. The state has the lowest power tariff for industrial use in India."

Dr Poongothai Aladi Aruna, minister for social welfare, government of Tamil Nadu, said, that foreign direct investment (FDI) in infrastructure is non-negotiable. She said that the single window system of Tamil Nadu has now become two-tiered with a state level investment promotion board to monitor and expedite all mega projects exceeding an investment of Rs100 crore and a project approval authority to monitor the projects with investment less than Rs100 crore.

According to P J Joseph, minister for public works department, government of Kerala, the state government is encouraging urban development and infrastructure projects in the areas of road, communication, airport, sea port and others on build-operate-transfer basis.

Speaking about Karnataka's plans Katta Subramanya Naidu, minister for large and medium scale industries, said the government is shortly coming up with an industrial policy that would aim at a 10-12 per cent industrial growth. The focus is on developing special economic zones in 15 districts.

Calling upon the governments to ensure financial returns on infrastructure projects R Seshasayee, president, CII said the regulatory environment must be proactive.


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States to create industry-friendly environment