” listed as the one of the most problematic factors for doing business. 12. estimates suggest that the lack of proper infrastructure pulls down india ’ s gdp growth by 1 – 2 percent every year. to my mind, any sector to thrive and progress in the long run, most necessarily needs a continued demand and an enabling business environment. in the context of infrastructure sector this “ enabling environment ” has a wider connotation covering among others, the presence of well - documented and stable administrative and regulatory policies ; a vibrant dispute resolution mechanism and a strong judicial system. undoubtedly, the availability of long - term finance and the cost thereof are also integral to the success of the sector. availability of finance for good profitable businesses has never been a problem and the statistics reveal that commercials banks ’ exposure to the infrastructure sector has grown at a sustained pace. i would argue that if the infrastructure sector has failed to live up to the expectations, it is more on account of lack of an “ enabling environment ” and the quality of demand rather than due to monetary policy actions that have some bearing on the availability of funds or the cost of borrowing. 13. the availability / supply of goods and services in the market place presupposes the existence of demand by the consumers. the fast paced growth in the indian economy witnessed in the past decade has placed increasing stress on physical infrastructure, such as electricity, railways, roads, ports, airports, irrigation, urban and rural water supply and sanitation, all of which already suffered from a “ marked ” deficit. the rapid urbanization has not only necessitated creation of new infrastructural facilities but also a need for upgrading the quality of existing infrastructure. infrastructure development in new townships is a priority so as to redistribute the influx of growing population. against this backdrop, new investments in creation of better all round infrastructural facilities such as irrigation, electrification, roads, drinking water, sanitation, housing, community it service, integrated cold chain for agricultural and horticulture produce, ports, hospitals, etc., have the potential to significantly contribute to domestic growth. likewise, the delhi – mumbai industrial corridor and the chennai - bangalore industrial corridor projects have also been conceived with a view to developing new industrial cities as “ smart cities ” and converging next generation technologies across infrastructure sectors. these industrial corridors are expected to provide a major impetus to planned urbanization in india with manufacturing as the key driver and in the process create employment and accelerate the economic growth.

pricing of infrastructural services 14. while the conventional wisdom is that the consumers require world class infrastructure in our country, a very important point to consider is whether the average potential user of these facilities is willing or in a position to pay for the world class infrastructure. there is a limitation on how much infrastructural capacity can a benevolent “ state ” create without stretching its own financials or without burdening its citizens with high user charges. hence, the pricing for using infrastructure services, which may be exclusively built by the private sector, in a public - private partnership or exclusively by the public sector, assumes utmost importance for the viability of the projects. while the prices cannot be raised too high, it is important that the realizations for the service provider / operator are remunerative and based on commercial considerations. also, there is a need to have an inbuilt mechanism in the services / pricing contract which provides for a pass - through of price hikes to the end users on account of increase in input prices. therefore, managing the transition from state - subsidised services to market based pricing becomes an extremely important piece in the puzzle. bis central bankers ’ speeches enabling environment 15. as i mentioned earlier, a very crucial aspect for the success of any business venture is the availability of an enabling environment. at the cost of repetition, i would say that the lack of an enabling environment has been the biggest bane for the infrastructure sector in our country. the high level committee on financing infrastructure which submitted its second report in june earlier this year has lamented that a large number of infrastructure projects are stuck or delayed across various stages of award, construction and operation. the report mentions that debt constraints, fuel supply challenges for power plants, environmental clearances, land acquisition, etc., have held up a large number of projects, which can achieve commissioning within the short - term if these constraints are suitably addressed. the report also highlights that infrastructure projects are fraught with disputes that cause inordinate delays due to slow resolution processes. it adds that project implementation is another major concern in respect of infrastructural projects as on an average, projects suffer from 20 to 25 per cent time and cost over - runs, which rises to as high as 50 per cent in some sub - sectors. 16. there have been conscious attempts by the government over the last two years to remove the various bureaucratic bottlenecks and regulatory hurdles which have impeded