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Policy thrust attracts private investment in telecom sector

BS Economy Bureau

Infrastructure has received the highest policy attention since the early 1990s and considerable success has been achieved, especially in attracting private sector participation in roads, ports and telecom.

Economic liberalisation in the 1990s brought about major changes in telecom, which was taken further by the New Telecom Policy 1999. Competition has been introduced in all the segments, which in turn has led to substantial reduction in tariffs and improvement in teledensity.

In fact, the Survey has said that the ongoing reforms in the sector have been completed ahead of schedule. "It also needs to be noted that there has been significant improvement in the private sector participation in telecom sector and about 45 per cent of the additional phones have been provided by the private operators during the current year."

In terms of approval of foreign direct investments, the telecom sector is the second largest after energy sector, with an inflow of Rs 36.08 billion during January to September 2001.

The second sector in which relative success has been achieved is roads.

"The fuel cess, illustrates how it is quite possible to invest in infrastructure, as long as there is the levy of adequate user charges and financing is therefore assured. The fuel cess can be leveraged further by the consistent application of affordable toll on all four lane highways," the Survey says.

The limited experiments can be extended effectively, particularly if they are leveraged further with levy of tolls.

There has also been improvement at major ports as per the principal indicators of port efficiency. The average pre-berthing waiting came down from 0.9 days to 0.5 days and the average turnaround time has come down from 5.1 days to 4.3 days between 1999-2000 and 2000-01.

"The port sector has also achieved some degree of success with new private investments coming in new container terminals and in private minor ports," the Survey says.

Though there is still some progress to be made in the regulatory structure for ports, availability of user charges has enabled new investments.

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