Myth of the 100 lakh crore investment in infrastructure and Danger of the TOT model

The main problem with the prevailing public discourse in India is debate gets struck in superficial issues and no one is focusing on the fundamental issues. Numbers of the GDP and FDI is being discussed but no one asks a question that - What a common citizen get the benefit of GDP or FDI increase? The government promised tap water to each household but no one is asking that where is the water?

Here I write to break one of such myth of headline-  Union budget proposed 100 lakh crore for the infrastructure.

My question is from where this money comes from? 100 lakh crore for in five years means 20 lakh crore per year. Total Budget size of ours is the 30 lakh crore per year where most of the money goes to the Subsidy, Social sector and defence expenditure. Infrastructure gets hardly 2.5-3 lakh crore per year ( This year 83,016 crore to the highways and 64,587 crores for railways.) So, maximum of 15 lakh crore for 5 years. Now, (100-15)= 85. From where Govt bring 85 lakh crore? The answer is from the private sector.

As I said earlier, We forget to ask basic Question and here is one basic question, When Private sector share is 85% in the development of the infrastructure, why we need the government? Keep remembering that Since the day of the Ashoka to Akbar to Atal Bihari Vajpayee, the road construction considers as the duty of the government. The road is always a public good. As we enter the new millennium, we introduced the PPP model for road construction. Later we witness toll booth on roads and now they became ubiquitous. Now, this year Government introduced the TOT model.

Let me simplify these three stages of the road construction - Since the independence to the 1990s, government build roads from taxpayer money. For the 1990 to 2017 -BOT dominates highways where Private party build a road and collect toll. Now in the TOT model, Govt auctioned the road to a private party and harvest money. The Finance model of the Road construction gets reversed totally. Earlier Govt build road form public money bow road is being used to collect revenue.

This is the entry that first time appeared in the Budget document and that also about the 10,000 crores. But none in the Media notice this. "Monetization of the National highways" Simply means that a National highway on which you travel free today, Tomorrow you have to pay toll on the same road. In the first phase, Govt select 9 roads of the 1600 km in length. This year it's 1600 km, Next year it may be 3000 km and after 5 years, You may have to pay the toll for the each and every km of the national highway. 

TOT model is not just about the Road sector. Statements of the Ministers showing a sign that it is soon to introduced in Railways. Govt eyeing Rs 50 lakh crore investment in railways by 2030: Piyush Goyal. That means 5 lakh per year while this year government allocation to the railways is just 1.5 lakh crore while in that only 70k crore is Budgetary support. So, it's likely for the government to auction existing public resources.

Civil aviation - Airports are already being tested for the TOT model. Privatization of the 6 airports gathers speed.

Now let me back the Basic question - From where Government get 85 lakh crore for the infrastructure investment? Here I gave details explanation about the road, rail and airports. But money form this auction would be a marginal amount against the target for the 85 lakh crore. So following would be likely sources…

The government may auction the canals, May auction the Taj Mahal, May auction the street Light, May auction Rural road, May auction sports ground, May acution schools and hospitals, May auction the public Garden, May auction the rivers, May auction forest, May Action Oxygen and this is an endless list.

I am not refusing the need of time that we need money for the infrastructure Development. We need it. But that doesn't mean we get to enter in the endless race of the private investment. It's tantalizing. It's like sugar- which taste good in starting but cause of the diseases. Likewise, the Private sector participation in the public good seems good in the initial phase but it breeds corruption and imposes a burden on the public.

Let me make simple - From your Income tax and GST, Govt manage to get 3 lakh crore infrastrucre spending and for that you wait for budget speech for 12 months in hope to the reduction of the taxes. Now just think that if govt. spends 20 lakh per year then what amount of the financial budget you have to face? Today you are paying Income tax, GST and Some toll tax on road , tomorrow you have to pay Water bills, Rail toll, Airport toll, Tourism toll, Hospital toll, Air toll and what not!