Inadequate allocation for Infrastructure in India's budget

T N Ninan writing in Business Standard, 6-7 March 2010 ( Mamata's China tour) has nicely captured a fundamental flaw in the recent budget: the inadequate allocation for Railways. I mentioned in an earlier blog that too much has been made out of the allocation of about Rs 173,000 crores for infrastructure. Ninan has given useful comparative figures about China to drive home the point that the allocation is indeed puny.

China has connected Beijing / Shanghai, by high speed rail to Guangzhou, Wuhan, Zhengzhou, Tianjin, Nanjing, Xian, Taiyuan and other cities in China.These high-speed rail services operate at 350 km to 400 km per hour and extend over 3,300 km of track. The Middle Kingdom plans to offer some 40 such inter-city train services (including a new Beijing-Shanghai link), stretching over a total of 13,000 km of track, by 2012 — almost twice the distance of India’s “golden quadrilateral”. Even China's non-high speed trains now run at 200 km per hour or more.

In contrast, the best speed on Indian Railways has remained unchanged at about 130 km per hour for four decades. Some years back the Indian rail system was bigger than China’s. But now the Chinese rail system carries four times as much freight as Indian railways do. The gap will increase further. In 2009, China increased its investment in its railways by a staggering 80 per cent to about Rs 400,000 crore. Further increases in capital outlay are coming (Rs 550,000 crore in 2010).

Now compare these outlays with India's allocation of Rs 173,000 crores for total infrastructure. We can understand how our politicians make misleading statements and get away with them.