One popular game in town right now is to put out estimates on how much investment India needs to upgrade its creaking infrastructure. It is a game that is being played by government bureaucrats, official committees, consulting firms and investment banks. Numbers as high as $500 billion have been bandied about.
We see no reason to doubt these estimates. But it is easy to forget in the midst of all this euphoria that that money is unlikely to flow into infrastructure unless that sticky old concern is dealt with—policy reform.
Two stories published in Wednesday’s edition of Mint show that the lack of clarity on the policy front can yet hold back investment. An anticipated change in the bidding rules for private cargo-handling terminals at ports could boost profits for existing projects. And foreign investors told this newspaper that the lack of clear timetables and opaque bidding rules could harm new investment in airports. Rules matter in any market.