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International Handbook of Network Industries

International Handbook of Network Industries

The Liberalization of Infrastructure

Elgar original reference

Edited by Matthias Finger and Rolf W. Künneke

This extensive, state-of-the-art Handbook provides a comprehensive overview of the various experiences of liberalization across different sectors, regions and disciplines.

Chapter 24: Infrastructure Reforms in India: An Analysis of Successes and Failures

Leena Srivastava and Shahid Hasan

Subjects: economics and finance, energy economics, institutional economics, public sector economics


Leena Srivastava and Shahid Hasan INTRODUCTION Infrastructure reforms started in the second half of the 1980s – with the opening up of the oil and gas sector to private participation followed by reforms in the telecom and electricity sectors. The design of further sectoral reforms since then, and its implementation, has undergone significant changes. Not only has there been a shift in emphasis from upstream reforms to downstream reforms but also from a focus purely on supply enhancement to one where demand management is receiving increasing attention. Another key factor that has influenced the design of reforms processes has been the challenge of providing access to services to the vast majority of India’s rural and poor population. New independent regulatory commissions have been created to provide a level playing field between incumbent public sector service providers and newer private participants and to promote competition. The Institution of the Appellate Tribunal has also been effected to circumvent the need to approach India’s notoriously slow civil courts. However, the inadequacy of powers and staffing of these commissions is increasingly resulting in an erosion of their credibility and legitimacy. This chapter analyses and compares approaches that have been taken in a few sectors of the economy and will argue the reasons for perceived and actual successes and failures in India’s reform efforts. INFRASTRUCTURE SITUATION IN INDIA: EVOLUTION SINCE THE 1980S Infrastructure is the key in transforming a low productive economy into a fast-growing agro-industrial oriented and highly productive ‘new’ economy (Ahluwalia, 2003). Construction of...

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