Challenge: Step up annual investment
India needs to spend about US$1.4 trillion (Rs.100 lakh crore) on infrastructure through to 2025, said Finance Minister Nirmala Sitharaman at the release of a Report of the Task Force on National Infrastructure Pipeline for 2019-2025.
In the past decade (FY 2008-17), India has invested about US$1.1 trillion on infrastructure.
The challenge is to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy which the government hopes to raise to US$5 trillion.
Sitharaman made a brief statement on the contents of the National Infrastructure Pipeline at a Press Conference in New Delhi on 31 Dec 2019, saying the Government will examine the recommendations of the Task Force and take action early.
To achieve this objective, a Task Force was constituted to draw up the National Infrastructure Pipeline (NIP) for each of the years from FY 2019-20 to FY 2024-25 with the approval of the Finance Minister.
The first meeting of the Task Force was held in September 2019. Subsequently, several meetings were held with various Departments, Ministries engaged in infrastructure development, Corporates engaged in infrastructure development & construction, Banks, Financial Institutions, Private Equity funds, and Industry Associations, including CII, FICCI & ASSOCHAM, to seek information as well as suggestions on reforms required in infrastructure sectors.
The exercise, the first of its kind, is expected to be followed up by a periodical review process. NIP will enable a forward outlook on infrastructure projects which will create jobs, improve ease of living, and provide equitable access to infrastructure for all, thereby making growth more inclusive. NIP includes economic and social infrastructure projects.
On the basis of the information compiled as on date, total project capital expenditure in infrastructure sectors in India during the fiscals 2020 to 2025 is projected at over Rs.102 lakh crore.
During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.
The detailed sector wise break of the pipeline is as follows:
Ministry/Department and FY 20-25 in crores
Renewable Energy Rs.929,500
Atomic Energy Rs.154,088
Petroleum and Natural Gas Rs.194,666
Total Energy Rs.2,454,249
Urban: AMRUT, SMART Cities, MRTS, Affordable Housing, Jal Jeevan Mission Rs.1,629,012
Rural Infrastructure Rs.410,955
Water and Sanitation Rs.361,810
Total Rural Infrastructure Rs.772,765
Agriculture Infrastructure Rs.54,298
Food Processing Industries Rs. 1,255
Food and Public Distribution Rs.5,000
Total Agriculture and Food Processing Infrastructure Rs.60,553
Higher Education Rs.118,348
School Education Rs.37,791
Health and Family Welfare Rs.168,622
Total Social Infrastructure Rs.356,701
Industries and Internal Trade Rs.299,237
Total Industrial Infrastructure Rs.307,462
Out of the total expected capital expenditure of Rs.102 lakh crore, projects worth Rs.42.7 lakh crore (42%) are under implementation, projects worth Rs.32.7 lakh crore (32%) are in conceptualization stage and rest are under development.
It is expected that projects of certain states, who are yet to communicate their pipelines, would be added to the pipeline in due course.
The Task Force in its detailed report has given recommendations on changes required to several key sectoral policies and other reform initiatives to be initiated by Central and State Governments.
A monitoring mechanism has also been suggested to ensure timely implementation, said the Finance Ministry in a release. fiinews.com