Back on track?

While investment inflows could fall well short of official predictions, investors are showing cautious optimism in the struggle to bring India’s creaking infrastructure up to date

George W Russell reports from Bangalore

The cursing drivers on Bangalore’s clogged roads won’t believe it; nor might the frustrated captains awaiting a berth at the bottlenecked Jawaharlal Nehru Port near Mumbai; nor would the thousands of fans at Eden Gardens in Kolkata booing in the dark following a power outage during a recent India-Sri Lanka cricket match, but the Indian government says it is determined to catch up on the country’s massive physical infrastructure deficit.

Prime Minister Manmohan Singh has made infrastructure improvement a key plank of his administration’s second term in office. “The results are yet to be seen but the government appears to be more resolute than its predecessor in terms of initiatives and early actions,” says Anoop Seth, co-head of Asian infrastructure at the Mumbai office of AMP Capital Investors, a Sydney-based investment manager with A$110.2 billion (US$96.9 billion) under management.

Lawyers agree that the second term of the Singh government is likely to see more activity. Many see his renewed mandate – expected to continue until 2014 – as the springboard to launch major projects. “The year 2009 was one of uncertainty – not only in light of the global financial crisis but also due to political uncertainty of elections and the formation of a new government,” says Rajiv Luthra, managing partner of Luthra & Luthra in Delhi. “Now that things appear to be settling down, some measures and policies are taking shape.”