Public Investments in India: Delays and Cost Overruns

Chapter 5.1 in Morris, Sebastian (ed.), "India Infrastructure Report 2003 - Public Expenditure Allocation and Accountability", 3inetwork, Oxford Univ Press, New Delhi, 2003

12 Pages Posted: 26 Nov 2012

See all articles by Sebastian Morris

Sebastian Morris

Indian Institute of Management, Ahmedabad - Economics; Goa Institute of Management

Date Written: January 1, 2003

Abstract

Public Investments in India have witnessed large delays and cost overruns. The same are estimated and shown to continue to be large, even though they have declined despite many changes in economic policy. What has brought about change in efficiency of overall investments is the sharp decline in the share of the public sector in investments. A modified Harrod-Domar model is used to estimate the growth sacrifice effects of delays and cost overruns and it is argued that the decline in the share of public investments in overall investments adds signficantly to the growth potential, which need to be recognised in macroeconomic policy as well. Environmental factors more than funds constraint have been the principal reason for delays and cost overruns.

Keywords: India, Public Investments, Planning Commission, Macroeconomics, Government Expenditure, Delays, Cost Overruns, Reform

JEL Classification: E6, H5, H8, O2, E1

Suggested Citation

Morris, Sebastian, Public Investments in India: Delays and Cost Overruns (January 1, 2003). Chapter 5.1 in Morris, Sebastian (ed.), "India Infrastructure Report 2003 - Public Expenditure Allocation and Accountability", 3inetwork, Oxford Univ Press, New Delhi, 2003, Available at SSRN: https://ssrn.com/abstract=2180680

Sebastian Morris (Contact Author)

Indian Institute of Management, Ahmedabad - Economics ( email )

Vastrapur
Ahmedabad 380015, Gujarat
India
+919824232121 (Phone)

HOME PAGE: http://sebastianmorris.org/

Goa Institute of Management ( email )

Ribandar
Ribandar
Panaji, Goa 403006
India

HOME PAGE: http://sebastianmorris.org/

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