#UnionBudget2016: Why Building Infrastructure Should Be a Priority

David Balan, an economist with the US Federal Trade Commission, once said that the best way to assess a city's infrastructure was to see whether all its streets had good sidewalks. On examining Indian cities, it's hard to streets with narrow sidewalks. In peak hours, life comes to a standstill because the demand for road space exceeds supply. It may seem that this will never change but, the truth is that all cities across the world have gone through such a phase at some point in its history. India's future is unlikely to be any different.

Plans unlimited

In the Union Budget 2016-17 presented in Parliament today, Finance Minister Arun Jaitley said that the total outlay for infrastructure for the financial year 2016-17 was Rs 2, 21,246. The government will revive 160 airports and airstrips; it will also enable entrepreneurship in the road transport sector by amending the Motor Vehicles Act. For public roads, the government has allocated Rs 97,000 crore in the Budget. The government intends to build 10,000 kilometers of highways and convert 50,000 kilometers of state highways to national highway roads in the financial year 2016-17. The government will also spend Rs 9,000 crore on Swaccha Bharat Abhiyan.

Being practical

However, it is not clear how efficiently the government will spend on such public infrastructure projects. Earlier, an undue emphasis was placed on spending as less as possible on infrastructure for long. Another issue that now hinders growth is whether the money government spends on infrastructure in a locality corresponds with the demand for infrastructure.

It is quite possible that cities are ruined by lower spending on infrastructure. For example, building a bridge in a city built across a river or a city built on a peninsula will increase the supply of land for urban expansion. Such a bridge may raise the value of the land across the bridge. If the bridge is not built, the land across the river or sea will not be easily accessible, lowering urban productivity, and increasing the cost of housing for people who are compelled to live in dense urban areas. The Mumbai Trans Harbor Link is a case in point. It may be true that roads are less expensive to build than bridges. It may be true that the bridge may cost about Rs 11,000 crore. It may be true that the bridge can be built by private enterprises, for profit. But, the fact still remains that if the bridge is not built, potential of incomparably more valuable urban land will not be unlocked.

A well-build infrastructure does much more. 1) A proper infrastructure will lower commute distances.

2) Carbon emissions will be lower if there are proper roads and high- density building in dense urban cores.

3) The preservation of agricultural land will be greater if infrastructure in city cores is better.

4) Good infrastructure in city centres is necessary to support high- density residential building, which allows walkability. This may even lower obesity.

In fact, good infrastructure is a solution to many problems of Indian cities including air pollution, road congestion, expensive housing, low life expectancy and water-borne diseases.