Infrastructure is at the heart of everything we do. It encompasses the power we use, the water we drink, the waste we dispose of, our education and recreation, our travel through air, highways, across bridges and through waterways.

The importance of proper infrastructure for sustained economic development of any country is well recognized. Inadequate and inefficient infrastructure can prevent an economy from realizing its full growth potential regardless of the progress on other fronts.

Over the past few years, the Indian economy has grown at a pace which is faster than the average growth rate of the global economy, averaging 8.8% a year in the past five years, according to the International Monetary Fund. One good thing about this investment led growth trajectory is that it has been achieved while different political configurations were in power and the benefits have been spread across sectors. However, as India's economy grows and makes rapid strides on the global canvas, the need for addressing deficiencies in our infrastructure is assuming even more importance. Economists estimate that inadequate roads, electricity and other infrastructure shave one to two percentage points off growth each year.

The need for world class infrastructure that keeps pace with the above average economic growth is clear. City roads are choked with traffic, power cuts are a fact of life and passengers are routinely delayed as booming air travel tests airport capacity. The new economic policies aimed at stepping up economic growth, improving market efficiency and competitiveness, and integrating the Indian economy with global markets have already placed a heavy demand on infrastructure services. The resulting bottlenecks pose serious impediments to enhancing productivity.

India's GDP growth rate has accelerated to about 6.7% today from 1.4% in 1991-92. The momentum peaked at 9.7% in fiscal 2006-07 before slowing as the worldwide recession set in. Analysts say the infrastructure sector as a whole needs to grow at 8 per cent a year to meet the Government's vision of even higher growth, more jobs and better basic living conditions for its people. Therefore there is a need for a holistic approach to the infrastructure sector.

The Indian infrastructure sector is at an inflection point. With the UPA's comfortable poll win, a stable reformist Government is now certain. India stands to gain the most among emerging markets from a resurgent global liquidity and the removal of political fears. Focus is likely to return to the infrastructure sector with expectations of major reforms boosting the sector. The Government thrust on large projects (roads, power, ports, airports) is likely to regain momentum based on an urgent need to develop world-class infrastructure.

As the world experiences a shift in the dynamics of growth from the West to the East, India cannot afford to lag behind the rising economies of the East. Experts say the new Government has its task cut out with billions of investments to be channeled into India's infrastructure sectors over the next five years to provide a strong foundation to achieve the hoped-for annual growth of 10%.

Infrastructure is a sector where direct imports of complete projects are unviable.

Infrastructure has to be built by local companies using local talent, local resources and on local soil. While technology can be imported, implementation has to be done by companies based out of the home country. With a stable Government now in place, corporate India's outlook has suddenly turned positive. Mega projects which were shelved in the light of the global economic crisis may now be revisited. In fact, the global slowdown has brought down the prices of raw materials, engineering imports, etc. which can be taken as a major opportunity for building infrastructure.

In addition, it needs to be stated that as economies slow down worldwide and in India, one of the early responses that Governments normally do is stepping up stimulus expenditure particularly in large infrastructure projects. Our investment led growth of the past 5 years has slowed down a bit in the last year. We see evidence that policy measures are likely to be taken to stimulate investment in areas which can drive economic growth in the future. Politics in India has taken a definite turn in the past few years. It is now clear that large parts of India's population vote for development and tangible benefits resulting from improvement of basic facilities in various constituencies. In this context, availability of basic services like proper roads, uninterrupted power, health care, sanitation and rail networks will come to the fore. It is expected that there will be significant policy focus in this area over the next 5 years.

India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1-trillion economy and the aspirations of its 1.2 billion population. The creation of infrastructure is a huge growth opportunity in itself. The building of roads, ports, railways, power plants, telecom infrastructure - all create demand for industrial goods and will accelerate future economic growth. There is also growing consensus that improvement in infrastructure can have strong impact on poverty alleviation b y reducing supply side constraints of primary commodities through proper mobilization of resources.

Infrastructure development has been accorded priority for the 11th five-yearplan for 2007-12 and the 12th plan from 2012-17 with projected investment requirements of $500 billion and $1.5 trillion respectively.

The interim budget for fiscal 2009-10 announced in February focused on infrastructure and easing foreign direct investment rules. The forthcoming Union Budget is likely to give a further boost to infrastructure spending in the country.

The Government has announced plans to spend 9% of GDP on infrastructure by 2014, up from 5% now. Estimates suggest that one-third of this investment will come from private companies. The Government's strategy of attracting private investment into the infrastructure sector has paid rich dividend in terms of significant participation of private investments in infrastructure projects through the Public Private Partnership (PPP) concept. Examples of such success are evident in some of the new airports, roadway projects, new transportation system in Delhi and in the telecommunications revolution that our country has witnessed. Successful projects lead to easy availability of technology and money for succeeding projects thus creating a virtuous cycle of more demand, more projects, more execution, more funding and greater benefit for all. Involvement of private investment not only fulfills funding requirement of the projects but it also has other advantages like bringing in latest technology for the projects, more efficient execution, better ROI, etc. The efficacy of private sector participation in infrastructure development would be contingent upon the capability to commercialize these projects whereby recovery of investments would be through a system of user charges. Therefore, there is potential for public PPPs to contribute more and help bridge the infrastructure gap in India.

A fast growing economy warrants an even faster development of infrastructure. The country's economy has spread its wings. However, for it to truly take off, the country has to improve infrastructure. The need of the hour is to speed up the process, by revising, revisiting and upgrading the development plans with a long-term view. Who does not want to see India post a double-digit growth rate of the GDP in the near future?