India’s march towards a $5 trillion economy hinges on infrastructure. Much of the discussion has centered around two big questions: (a) is India investing adequately in infrastructure?; and (b) whether our investments are leading to timely completion of projects? The first question has been debated for years and is unlikely to give a conclusive answer, given the dynamic relationship between economic growth and infrastructure demand. In an economy striving to make efficient use of available capital, higher priority should be given to the second. Timely completion of infrastructure projects requires regular monitoring and periodic course correction. Such monitoring is a routine process that systematically collects data on specified indicators of the extent of progress. This is a demanding task that has been neglected in the past, as the traditional ‘implementation monitoring’ mainly deals with activities, inputs and immediate outputs.
While multiple sources of data exist on the progress of projects within the government, timely availability of high quality data from a dedicated reliable source will reduce the need for additional agencies for data collection. It will also provide greater depth, as such agencies will be able to collect information on a regular basis, whereas appraisers usually collect data only at designated points.
A concerted effort towards generating quality data on the status of infrastructure projects should include three features. First, there is a dire need for accuracy, in terms of how well the data describes the actual state of progress. Incorrect data creates problems, as it leads to wrong conclusions and stalls the announcement of new projects. second, the data collected must be complete; That is, everything that needs to be collected must be available. If the data is incomplete, it does not give usable insight, which often leads to time and cost overruns. Therefore, it is important to set goals in the right format for data collection. Third, a much needed feature is timeliness; That is, the reported data should not be out of date. Data becomes less useful and less accurate as time goes on. Outdated data can lead to actions that do not reflect current reality.
If one considers the multiplicity of implementing agencies then the importance of timely data on the status of the project increases. Broadly, we can categorize large infrastructure projects implemented by central, states, both joint and private agencies, with varying levels of accountability for completion in different sectors. Given this environment, better data quality will help improve India’s record of better decision making, risk mitigation and timely completion across governments. However, collecting high quality data can be a challenge, as the agencies involved require better coordination and integration of data systems across different departments or ministries. It may also require proper equipment or procedures.
Given that most of the monitoring takes place at the central level and the bulk of the data is in the states, there is a need for a concerted effort to coordinate data collection and reporting and improve data quality. A data collection plan is needed to determine what kind of data we need. Any such plan should also define the roles of all personnel involved in collecting the data; It should also establish clear procedures for communicating between departments on data-related matters so that confusion does not arise. Setting data quality standards should also be an integral part of the data collection plan. Uniformity across ministries and departments requires clarity on what data to keep, what to delete and what to correct. As data on project progress and budgets are revised, a set of guidelines for data improvement should be developed; We need conventions and uniform practices for data improvement. These should define who is responsible for correcting and refining the data and what methods they should use to correct it.
A robust data system will ensure that the goals of the National Infrastructure Pipeline are achieved. The challenge lies in data integration and distribution across different levels of governments, ministries and departments, as data quality issues can emerge in the process, especially if the software platforms differ. It is equally important for states to report data on time. The emphasis should be on the opportunity cost of capital for projects and the overruns of time and cost over runs so that states can scrape that score. We also need credible reports on the factors hindering the progress of large projects. A list of these factors will help decision makers to account for patterns and these entitlements from the project planning stage.
Ease of Living and Doing Business is critically dependent on the infrastructure available in our economy. Considering the duration of construction of mega projects, timely monitoring and progress improvement are imperative. Private entities have their own mechanisms to ensure timely completion of the project, whose good practices can be adopted by the government. Considering the extent of debt financing and cost inflation in infra projects, the direct costs of project delays add up over time, and if we also take into account indirect costs, the accumulated shortfall of economic benefits is unreasonably steep. Is. Monitoring is an effort to stop these leaks and all stakeholders will need to work together for its success. A prerequisite for successful monitoring is timely availability of data. But the data is only useful if it is of high quality. When we oversee large infrastructure projects, bad data is at best, a fact that our generators of data must appreciate.
These are personal views of the author.
M. Suresh Babu is an advisor to the Economic Advisory Council to the Prime Minister and Professor of Economics at IIT Madras