Infrastructure Service Delivery: An Overview

1. Infrastructure Service Delivery: An Overview

2. India’s infrastructure deficits Two types of deficits: • “Investment gap”: Gap between existing and required stock of assets • Infrastructure investment in India, presently at 4-4.5% of GDP, might have to increase by an additional 3-4% of GDP a year to sustain annual GDP growth rates of 8% • “Access gap”: Gap between quality of services produced by existing assets (in such sectors as electricity, roads, water and sanitation) and what is needed by consumers • The poor bear a disproportionate burden of coping with the costs of poor services • Studies in Andhra Pradesh & Haryana estimated that the costs of repairing irrigation pump motors, burnt out by erratic voltages, amount to 10% of gross income for marginal farmers but only 2% for large farmers

3. The access gap: A pressing need for better quality of service delivery from existing assets Percentage of habitations not connected by roads, by Indian state Percentage of the population with access to sewerage facilities, by Indian state Access to power, by Indian state Sources: India Investment Climate Assessment, World Bank (2004); Ministry of Rural Development, Government of India (2006).

4. Improving infrastructure service delivery • Greater accountability, through empowering citizens to demand better services • Reform strategy: • unbundling of roles (policy making, regulating, financing, asset ownership, service provision) • clear delegation of goals • autonomy for service provider • informed accountability and enforceability - through consumer choice and citizen voice • Role of public-private partnerships (PPPs) • PPPs can help mobilize additional resources from the private sector • More importantly, PPPs offer a transparent commitment to finance the additional infrastructure by users, rather than all taxpayers • Decentralization can help improve the delivery of local services • Increased community participation in planning and delivering rural infrastructure

5. The World Bank’s engagement • Measuring the service delivery gap (various analytical products, e.g., Investment Climate Surveys, Household Access Surveys) • Supporting greater accountability • Supporting AP’s power sector reforms - focused on the creation of a regulatory agency and unbundling of the roles/responsibilities of the power utility (within a public sector framework) • Technical Assistance (TA) to facilitate power sector reforms in West Bengal • Catalyzing PPPs • Ongoing analytical support and advisory services to Government of India and state governments on developing PPP frameworks/guidelines and capacity building support for implementing PPPs • A series of three Loans for Tamil Nadu Urban Infrastructure Development • Preparing a Loan to support the India Infrastructure Finance Corporation Limited in its mandate to help finance large infrastructure PPPs • Decentralization • Local government development, through knowledge sharing & TA, and also through Lending (e.g., Karnataka Panchayats Strengthening Project) • Increased community participation in planning and delivering rural infrastructure • Efforts to ensure that projects in sectors like rural drinking water designed to ensure maximum community involvement (e.g., Rural Water Supply Projects in states like Karnataka, Kerala, Punjab, Uttaranchal) • Helping India meet its infrastructure investment gap through investing in new assets • A host of Lending projects focused on National Highways, State Roads, Rural Roads; Water Supply & Sanitation; new engagements in Hydropower, clean energy