Is the infrastructure allocaton adequate?

Vinayak Chatterjee, an infrastructure expert, writing in the Business Standard ( March 15, 2010) mentions that the total size of the Union Budget is about Rs 11.09 lakh crore. The infrastructure allocation is thus 16 per cent of the Union Budget. Of the Rs 373,000 crore of Plan expenditure, the infrastructure allocation is Rs 1.73 lakh crore or 46 per cent of Plan allocation. So it would seem that the government is taking infrastructure very seriously indeed.

But how much of these allocations actually result in the creation of infrastructure assets? For example, the allocation of Rs 40,100 crore for the National Rural Employment Guarantee Scheme (NREGS) in the Rural Development Section, does not all go towards creating infrastructure. Probably only a very small proportion does. But as Chatterjee mentions, this is the way the finance ministry currently "defines" infrastructure!

As per the 11th Plan, the nation needs $500 billion (Rs 22.5 lakh crore), or $100 billion per annum. This translates into a requirement of Rs 450,000 crore per annum. Of this, the Union Budget is able to provide for Rs 173,000 crore, or roughly 38 per cent. Chatterjee argues that this is very much in order, considering 30 per cent is slated to come from public private partnerships (PPP), and the balance of 32 per cent from states and off-Budget resources. I tend to disagree. Much of the so called budget allocation will not lead to capital formation but will go into revenue spending or in a worst case scenario, end up as leakages.

I have a simple question. Why does it need someone like Chatterjee to do all these calculations and figure out what is going on? If Pranab Mukherjee is truly convinced that what he is doing for infrastructure is enough and far more than any other budget in recent years, why could he not give us all the relevant facts? The very fact that we still do not know for sure what are the tangible outcomes of a flagship program like NREGS shows that the government has no accountability whatsoever. It can keep rattling off figures and we would never know what is the ground reality.