Infrastructure

'Infrastructure' has been touted as the key driver of economic growth engine of the country. Look at any b-school journal, annual lecture, prime time talk on any business channel, seminars, everybody says India is lagging behind China in terms of provision of world class highways, ports, airports, townships etc. China is going ahead and India is not moving an inch towards the set goals.
No doubt, we are gradually getting rid of our slumber on this front and acting in a concrete manner to build impressive physical infrastructure across the country to enable business to prosper and common man to seek proper care from the service providers across the spectrum of activities.
Despite some progress on infrastructure front, albeit slowly, critics always shout from the rooftops that dragon marching ahead of us, and that it is beyond our capability to meet the benchmarks already set in the arena. Their criticism however is confined to physical infrastructure. China's high rise buildings and classy roadways are undoubtedly making headlines unlike India, where we believe 'slow and steady wins the race'.

My point is that comparisons are always odious. If at all comparison is to be between the two, one has to look at broader picture.
The term infrastructure has to be construed in a holistic manner, to include financial and social infrastructures as well. The latter is not the topic of discussion here.
India's financial infrastructure, as is obtaining today, is something every Indian should be proud of, be it banking, insurance, or financial markets. The services offered by our private banks or modernized PSU banks are at par, if not better, with those of developed countries, be it long term lending or short term provision of working capital requirements, retail banking.
The elaborate securities regulatory regime established by capital markets watchdog SEBI has been largely responsible for the orderly conduct of stock markets, particularly in the last few years. Those who are keeping track of the stock markets will tell how the markets are steered clear of scams (after Ketan Parekh's K-10 fraud, there is hardly any scam to talk about) except periodical episodes of local nature, where the victims erred on the left side of the caution and burnt their fingers. Such misadventures of irrational exuberance on the part of investors shall not be attributed to SEBI. Even the demat scam occurred due to the casual attitude of the depository participants rather than the system's failure.
Well developed derivative markets, both for short term speculation and risk-reduction for genuine traders, has been providing much needed solace in the wake of unprecedented bull run on the share market side.
The dynamic structure of security markets have attained such a stature that it is being emulated by several countries cutting across the continents. Even New York Stock Exchange has been reported to have shown interest in entering into an agreement for information sharing and training with National Stock Exchange and SEBI. Mind you, NYSE is a century plus old institution, whereas NSE is baby in front of NYSE; NSE has very recently celebrated its 12th rising anniversary.
On the financial infrastructure side, China is still at the elementary stage. It has couple of State run banking behemoths of global size, but their functioning is in shambles and the size of Non Performing Assets is alarmingly high.

Back home, there is a lot to be improved on the social infrastructure, be it law & order, elimination of child labour, atrocities against weaker sections, speedy criminal justice dispensation mechanism, etc.

The liberalisation process had remained largely obsessed with the creation of financial infrastructure and freeing up certain sectors for Foreign Direct Investment and results already there to witness; in fact RBI is reported to be burning midnight oil on how to regulate the heating economy. Our desi industrialists, who had vehemently opposed opening up of the economy a decade ago and lobbied vigorously for creation of a level playing field for basic survival, have now acquired such a financial leeway in the wake of liberalisation and globalization that they have started leveraging their assets for acquiring global outfits with enormous ease. One could safely conclude that the growth engine is more or less on the right track to reach a two digits growth rate; that will be a dream come true.

Now it is high time we focused on creation of better infrastructure to sustain the growth momentum, which does not appear to be very difficult, taking into consideration the kind of telecom infrastructure we have been able to put in place in a short period of time, that too largely with the aid of private equity.