Free Chanakya's New Manifesto: To Resolve the Crisis Within India by Pavan K. Varma Page A

the private sector in modernizing stations and freight terminals, or setting up public private partnership (PPP) projects on large swathes of unused railway land.
    The same sorry story is manifest in other key areas of the country’s infrastructure. For instance, better and more roads contribute over 0.5 per cent to the country’s GDP, quite apart from adding to the convenience of travellers. But all major road construction projects are behind schedule, and the government could not even appoint a chairman for the National Highways Authority of India for over a year. New and upgraded ports facilitate international trade and investment and reduce prices for the consumer, but as many as eleven of the sixteen major projects in the pipeline are delayed. Clearances for the Jawaharlal Nehru Port Trust and the Chennai Mega Container Terminal were pending for three years. For the Orissa Dhamra Port, the concession was signed in 1998, but even after the private sector firm Larsen & Toubro picked up the entire stake in the project in 2004, environment clearances took three years. The concession for the Dighi Port in Maharashtra was signed as far back as 2002; the plant only became operational in 2011.
    The condition of our civil aviation sector makes for even more dismal reading. According to the International Air Transport Association, airlines globally made a profit of $18 billion in 2011. In India, passenger traffic increased by 16 per cent in 2011. Yet, Indian carriers lost $400 million, over2,000 crore. Air India’s outstanding loans and dues are in the vicinity of a staggering70,000 crore! The solution has been clear to anyone with even a basic knowledge of economics: the government must disinvest its stake in Air India and allow the carrier to restructure and revamp on sound business principles, as has been demonstrated by airlines like Indigo. In fact, the entire disinvestment plan of the government has been patchily implemented, with too little being disinvested too late. The government must get out of sectors it has no business to be in, such as civil aviation, and if it isn’t willing to entirely exit the sector it must allow for much greater partnerships with the private sector. The decision to partially allow FDI in aviation was finally taken towards the end of 2012, but even this much-delayed move will not help until tough decisions are taken on the nation’s long-standing money losing air service—Air India.
    It is true that high fuel prices have contributed towards the woes of our carriers. But this only highlights our deplorable track record in boosting crude oil exploration. Almost 85 per cent of India’s estimated trade deficit of $150 billion in 2011-2012 is due to oil and gas imports. We need to import as much as 80 per cent of fuel for our energy needs. The oil and gas sector is, thus, of strategic importance for us. But what has been our performance in this sector? Bombay High was touted as one of our significant discoveries, but its production has been consistently falling. An investor-friendly crude oil exploration regime should have been one of the first priorities of any government in the recent past, but little has been done to set it in place. Even routine decisions like Vedanta’s acquisition of Cairn Energy’s India assets were delayed for almost a year; similarly, Bharat Petroleum’s acquisition of a part of Reliance India Limited’s overseas fields took forever. China determinedly trawled through much of the developing world in a focused bid to secure its mineral and oil requirements. Its oil exploration program within its boundaries is aggressive. Not surprisingly, China produced 203 million tons of oil in 2011, while our tally was a meager 33.7 million tons. Rather than finding foundational long-term solutions, such as a price deregulation policy, successive governments have only been concerned about continuing the expensive exercise of indefinite subsidies. All the country’s major