The Cabinet Committee on Infrastructure today approved the following :

(i)           Framework for using the harmonized Master List of infrastructure sub-sectors.

(ii)          Principles for  updating the Master List

(iii)        Creation of the institutional mechanism to update the Master List and for revisiting the sub-sectors outside the Master List.

Harmonization of the existing definitions of infrastructure sectors will facilitate a coordinated approach, among  agencies providing support to infrastructure, and, thus spur infrastructure development in a more optimal manner.

 Background :

The Prime Minister's Office (PMO), vide ID dated August 4, 2009 had asked the Ministry of Finance to urgently consider and resolve the issue of uniform definition of infrastructure. The Ministry of Finance had thus moved a proposal for approval of CCI of a harmonized master list of 29 infrastructure sub-sectors as depicted at Annex.l and also for creating a framework and an institutional mechanism for its updation.

 The harmonized Master List of sub-sectors, identified as infrastructure sub-sectors, is meant to guide all the agencies responsible for supporting infrastructure in various ways. It has consciously been decided not to have a rigid and inflexible listing of sub-sectors, to be made universally applicable to all agencies. Each financing agency shall, therefore, be free to spell out its reasons and draw its own list of sub-sectors out of the Master List, which it intends to support, with adequate justification for inclusion/non-inclusion of specific sub-sectors from the Master List. If any agency is presently supporting a sector/sub-sector which is outside the harmonized Master List, it may continue to do so and the matter will be revisited after an appropriate period of time by the institutional mechanism.

Henceforth, inclusion of new sub-sectors proposed by a particular agency would be done only when applicability of the six characteristics of infrastructure (namely natural monopoly, high sunk costs and asset specificity, non-tradability of output, non-rivalness in consumption, possibility of price exclusion, and presence of externalities) and one or more of the three parameters (namely its importance to the scheme of economic development, its ability to contribute to human capital and the specific circumstances under which it has developed in India) has been assessed; and a clear and identifiable link with the support objective, which that agency seeks to serve, has been established.

The institutional mechanism to update the Master List and for revisiting the sub-sectors outside the Master List, will be a Committee chaired by Secretary, Department of Economic Affairs with Member-Secretary, Planning Commission, Secretary, Department of Revenue, Chief Economic Adviser, and one representative each of RBI, SEBI, IRDA, PFRDA and the Secretary of the concerned Administrative Ministry/Department, as members. The Committee will be serviced by DEA and will make recommendations to the Finance Minister for decision.

Annex-I

Master List of Infrastructure sub-sectors

1.    Includes supporting terminal

2.    Includes strategic storage of crude oil

3.    Includes city gas distribution network

4.    Includes  optic fibre/cable networks which provide broadband / internet

5.    Includes Medical Colleges, Para Medical Training Institutes and Diagnostics Centres

6.    Includes cold room facility for farm level pre-cooling, for preservation or storage of agriculture and allied produce, marine products and meat.

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AD/SH/RK