Infrastructure Laws in India

February 16, 2022

The fort of economic success is built on the foundation of infrastructure. It acts as a mother to every economy, ensuring not only its evolution but also its consistency in growth. India, which has lately awakened to “economic realities,” is attempting to achieve “economic nirvana” by maintaining a steady focus on infrastructure growth. India is on the verge of embarking on a new path of economic liberalization and revolutionary development. Infrastructure, which is the backbone of economic development, has been prioritized, and the government’s aggressiveness in achieving the greatest results is reflected in its dedicated efforts in this direction.

The infrastructure sector, which consists of several different sub-sectors, is governed by specific statutes for each of these sub-sectors. The techniques and mechanisms of private participation are clearly laid forth in these statutes. In most cases, private participation is permitted through the granting of licenses to private developers or through contractual arrangements. The scope and amount of private participation are determined by the state government in question, and it can range from low to high.

The legal framework which governs the infrastructure sectors has been illustrated, in brief, hereunder:

^ Power / Energy: The Electricity Act, 2003 is India’s fundamental legislation managing electricity including renewable energy (RE). The central government and the state governments share the power to legislate on issues relating to electricity. In the event of a conflict between the two, the central legislation will take precedence over the state legislation.

The Electrical (Amendment) Bill, 2021, is the most recent legislation for this sector. The Union Government’s goal of providing “electricity for all” has accelerated power generation, particularly renewable energy, which now has a capacity of around 95 GW and is expected to reach 175 GW by 2022 and 450 GW by 2030.

The regulatory framework for the Energy sector includes Central Electricity Authority of India, Appellate Tribunal for Electricity, Central Electricity Regulatory Commission, State Electricity Regulatory Commission, Central Transmission Utility, State Transmission Utility, National Load Despatch Centre, Regional Load Despatch Centre, State Load Dispatch Centre, Bureau of Energy Efficiency, and the Appropriate Commission.

^ Airports: The Ministry of Civil Aviation (MoCA) is responsible for the administration of this sector in India. The Airports Authority of India Act, 1994, the Aircraft Act, 1934, and the Aircraft Rules, 1937 govern the airport sector. These laws allow for private participation through the issuance of a license for an airport that is not owned by the government and the formation of a joint venture with the Indian Airports Authority.

The principal regulatory authorities for regulating this sector include the Directorate General of Civil Aviation (DGCA), the Airports Authority of India (AAI), and the Airport Economic Regulatory Authority (AERA).

^ Roads: The National Highways Act of 1956 and the National Highways Authority of India Act of 1988 govern the road sector in India. The National Highways Authority of India is responsible for the development, maintenance, and management of national highways which is under the Ministry of Road and Transport.

The dispute resolution mechanism of the national highways is governed by a two-tiered structure that involves state-level highway administrations and appellatory national highway tribunals.

^ Water: The Indian government has ambitious intentions to utilize its rivers and water resources to provide a less expensive, pollution-free, and more efficient mode of transportation. The National Water Policy of 2002 is the governing legislation in this sector that supports private sector involvement in the planning, implementation, and management of water resources projects for a variety of uses. This sector, with its ambitious goal to connect rivers across the country, presents a significant investment potential for investors.

^ Railways: In India, railways are the primary mode of transportation. The Railways are reserved for the public sector, hence it is not free from the need for an industrial license.

The Railways Act, 1989 is the governing legislation for this sector and is regulated by the Ministry of Railways.

^ Ports: Through transparent competitive bidding, both the central and state governments have taken many steps to encourage private investment in this sector. The Major Ports Trusts Act, 1963, is the principle legislation governing this sector.

The Ministry of Ports, Shipping and Waterways, is responsible for the formulation and administration of the rules and regulations and laws relating to ports, shipping, and waterways.

^ Oil and Natural Gas: The Petroleum and Natural Gas Regulatory Board (PNGRB), constituted under the Petroleum and Natural Gas Regulatory Board Act 2006, has been mandated to regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products, and natural gas. Some legislations that govern this sector are – Oilfields (Regulation and Development) Act 1948, Petroleum and Natural Gas Rules 1959, Mines Act 1952, and the Oil Mines Regulations 2017. The Ministry of Petroleum and Natural Gas is responsible for administering this sector. The Government of India is planning to spend around Rs 7.5 trillion to build oil and gas infrastructure over the next five years, said Prime Minister Narendra Modi last year (February 2021).

References

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February 16, 2022