‘Poor infrastructure driving up operating costs for India Inc’

March 12th, 2009 - 5:57 pm ICT by IANS  

New Delhi, March 12 (IANS) Infrastructure inefficiencies like poor roads and inadequate power generation are the major factors that drive up India Inc’s operating costs, a survey said Thursday.
According to the survey conducted jointly by global consulting major KPMG and Economist Intelligence Unit, around 95 percent of Indian top executives feel infrastructure investment was insufficient in the country to support the long-term growth of their organisations.

“Respondents in India pointed out that the rapid growth the country has witnessed over the past few years has considerably strained its infrastructure. India has not adequately considered building infrastructure ahead of demand, and has typically swung into action only when the bottlenecks become fairly apparent,” the report said.

As many as 328 top executives or board members from 21 countries, 47 percent of them being chief executives, participated in the survey.

While 66 percent of the total executives surveyed indicated that existing transportation infrastructure was driving up operating costs for their companies, 62 percent of Indian executives said the state of existing energy and power supply infrastructure was adding greatly to the cost of operating their organisations.

Another major cause of worry was the woeful state of social infrastructure - 56 percent of respondents at the global level felt that lack of this impacted their operational costs.

“Education and health are the biggest concerns, while social infrastructure affected the ability of companies to attract qualified employees, their competitiveness and ability to expand,” the report said.

Jai Mavani, head of infrastructure and government at KPMG India, said: “As it is no surprise that transportation and energy have been ranked as a high priority by corporates, the interesting observation is that social infrastructure like education and healthcare also finds place as growth imperatives.”

“And there lies the opportunity for India,” he added.

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