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Tuesday, August 09, 2005

Infrastructure and India.

Back after a long, long hiatus.

On July 25, 2005, Intel Corp (NSDQ:INTC) announced that they were planning to build a new 300 mm wafer factory in Arizona. It seems that India was one of the contenders for Intel's new fab. And, as the end result goes, Arizona certainly pipped India for Intel plant. Given the fact that India seems to be at the forefront of nations to which much of the work from developed nations is being outsourced, what can be the reason for such a decision on part of Intel?

The recent article in Reuters pretty much sums up the feelings abound for companies planning to shift such fabrication facilities to India. Even though India has progressed leaps and bounds in the past decade or so, it sorely lacks the infrastructural facilities needed to be an all-round player, when it comes to be the foremost player in the developing economies. The complete breakdown of the machinery in Mumbai during the recent deluge is a live testimony of the level of preparedness. The financial capital of the country was literally turned into an island, with no respite whatsoever.

There are plans to have a good road transport infrastructure starting with connecting most of the big cities by quality roads. However, it has been faced with much resistance by many groups, including the environmentalists. It was, keeping in mind the fact that good transportation infrastructure is one of the most important requirements for a nation to develop, that president Dwight D. Eisenhower, initiated the interstate program in US, even though he was faced with the strongest opposition. Privatization and Public-Private partnership offer the best option for infrastructural development, but many favour the grossly inefficient nationalization policy. The government plans to have a single-rate telephone call facility throughout India by 2007. I wouldn't be surprised if it is faced with opposition from those with vested interests.

It is high time that, for infrastructural development of India, there exists a symbiosis between the government, and the private sector for the benefit of the country. Of course, that implies taking into confidence the non-governmental, non-profit organizations too. However, it is the responsibility of such organizations too to understand that there exists a give and take relationship, whenever a change is imminent. India, currently, is at that crossroad where it has to decide whether it wants to keep moving towards progress as it has been in the past decade or revert back to the archaic policies taking us back to the stone age.


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