February 2011 - CII

policy pulsepolicy pulsePhysical InfrastructureThe relationship between infrastructure development and economic growth is well established. Superior infrastructure reducescost of doing business and enhances the investment attractiveness of the State/region. The development experience of theIndian States, bears out the fact that States with better infrastructure facilities have witnessed rapid industrialization. For them,infrastructure development remains central to the economic objective of achieving higher growth rates.Infrastructure bottlenecks not only slow down growth but also increase the cost of doing of business thereby adversely impactingindustrial competitiveness. For example inIndia, logistics cost is around 13 per centInfrastructure in the Northern Regionof GDP, which is high compared to 9-10Northern Region (NR) All Indiaper cent in the developed economies 1 . Power Installed Capacity (in MW) 42,189 1,59,399Northern Region, encompassing theHydro – 31.6 Hydro – 23.1UT of Chandigarh, and States of Delhi,Thermal – 58.9 Thermal – 64.3Haryana, Himachal Pradesh, Jammu & Energy mix (in %)Nuclear – 3.8 Nuclear – 2.9Kashmir, Punjab, Rajasthan, Uttar Pradesh &Renewable Energy Renewable EnergyUttarakhand, is one of the largest regions inSources –5.7 Sources – 9.7the country. In addition to the geographicalexpanse, the region also has huge varietyof terrain, is landlocked creating addedlogistical challenges for the industry. GoodInfrastructure therefore becomes evenmore essential for the economic and socialprogress of the region.A look at summary indicators showsthat overall the Northern Region haskept pace with the infrastructuredevelopment across the country.National Highway Length (km) 20,220 70,934Length of NH in km/ 1000 sq km 20.0 21.6Total Rail Network (km) 19,311 64,015Length of Rail line in km/ 1000 sq km 19.1 19.5International Airports (No.) 4 14Domestic Airports (No.) 27 103Telephone Subscribers (Million) 192 621No. of Telephones/ 100 population 52.7 52.7Source: Central Electricity Authority (CEA), Ministry of Road Transport & Highways, Ministry of Railways, Ministryof Civil Aviation, Telecom Regulatory Authority of India (TRAI)However there are significantvariations across the region.Power: The total installed capacity inNorthern Region as of March, 2010, is42,189 MW. Of the current generationcapacity, the share of thermal hasremained the highest at about 58.9 percent. The share of renewable energy hasgone up from 1.19 per cent at the end of1KPMG – CII Report on “Competitiveness Through Efficient Logistics”March 2005 to 5.7 per cent presently, butstill continues to be much lower than the allIndia percentage. The share of hydro hasdeclined from 33.15 per cent at the endof March 2005 to 31.6 per cent at the endof March 2010 while that for nuclear hasremained more or less constant at 3.80per cent as compared to 3.63 at the endof March 2005.Despite having a share of 26.5 percent in the overall installed generationcapacity in India, the peak demandsupplydeficit is higher in northern regionat 15.4 per cent compared to all India(13.3 per cent).Within the region, Punjab, Uttar Pradeshand Jammu & Kashmir have the highestpower deficits of 24.3, 21.1 and 32.3 percent respectively. Uttarakhand (6.0 per cent)10 C I I n o r t h e r n r e g i o n n e w s l e t t e r