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Pep pill to energise core sector

New Delhi, Feb. 27: The government plans to focus on a few key principles to energise the infrastructure sector: well-enforced user charges, exploitation of new technologies, private sector production and a regulatory framework that fosters competition.

The Economic Survey 2002-03 has lauded the growth in telecom sector and has suggested the need to develop environment for “lively competition between multiple private firms, with a strong role for Telecom Regulatory Authority of India to establish pro-competitive policies.”

The Survey, however, has stressed the need to enforce user charges in the power sector. “The key bottleneck faced today lies in the enforcement of user charges in distribution. The losses in power distribution in the country are enormous,” it says.

“They are important from a different perspective: that of obtaining a fiscal correction. Improvements in distribution alone could account for over 1.5 per cent of gross domestic product of the fiscal correction,” says the Survey.

While the generation does not pose any problems of public goods, it can be a normal private industry, provided the downstream buyers operate within a sound institutional framework.

In the road sector, the survey has suggested that new road links will have to be built between cities and a few four-lane highways will need to be converted into six-lane expressways. The focus will remain on the completion of National Highway Development Project.

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