Please do not attack me or the source as anti-India for it's critical analysis. We all want what is best for India. But these rants are to shame us and our administrators to look at the reality of our global competiveness.
Of all India's failures, lousy infrastructure may be the most puzzling. The nation's highway network stretches just 124,000 miles, compared with 870,000 miles in China. Most of them are simple two-lane affairs, maintained badly if at all. In 1999 the government launched a national program that will build another 28,000 miles of highways at a cost of $38 billion. The first phase calls for construction of a Golden Quadrilateral highway linking India's four largest cities. It's not enough. Morgan Stanley estimates. India is spending only about $2.5 billion a year building roads, while China is spending $25 billion a year. For goods sent by rail, freight costs are twice the average of other developed countries' and three times those in China. At India's ports, shipments often languish for days waiting for customs clearance and loading berths; goods typically take six to 12 weeks to reach the U.S., compared with two or three weeks for goods from China. Electric power in India costs twice as much as in China: Public utilities sock it to industrial producers to make up for the power they give away to farmers and the urban poor. The national grid is so bad that as much as 40% of the electricity generated is simply lost in transmission.
The result is that firms in India pay far more than rivals in China to produce, distribute, and export their products. Consider the plight of Bharat Forge, India's most successful auto-parts supplier. Bharat has the world's largest single-site forging facility. Over the past five years the company has become a trusted supplier of crankshafts, axle beams, and steering knuckles to top-tier clients such as Toyota, Ford, and DaimlerChrysler. Exports account for 40% of sales. But Bharat is located in Pune, an industrial city 75 miles from Mumbai. CEO Baba Kalyani says that, based solely on distance, his trucks should be able to travel to Mumbai's port and back two times each day. Instead, even with the recent completion of a new highway linking the two cities, a roundtrip typically takes three days. Kalyani figures infrastructure-related delays at the port put him at a 17% cost disadvantage relative to overseas competitors.
*From India on the Move, Fortune, Nov 4