Govt laying $1.4 trillion infrastructure pipeline to $5 trillion economy

Making a brief statement on the contents of the report on the National Infrastructure Pipeline at a press conference in New Delhi on Monday, finance minister Nirmala Sitharaman said the government will examine the recommendations of the task force and take action early. 

Prime Minister Narendra Modi had, in his Independence Day-2019 speech, highlighted that Rs100,00,000 crore would be invested on infrastructure over the next five years, including social and economic infrastructure projects.

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 task force is chaired by secretary, DEA with CEO (NITI Aayog), secretary (expenditure), secretary of the administrative ministries, and additional secretary (investments), DEA as members and joint secretary (IPF).

The task force held its first meeting in September 2019. Subsequently, several meetings were held with various departments/ministries engaged in infrastructure development, corporates engaged in infrastructure development and construction, banks/financial institutions, private equity funds, and industry associations, including CII, FICCI and ASSOCHAM, to seek information as well as suggestions on reforms required in the infrastructure sector.

This 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, says a finance ministry release.

On the basis of the information compiled as on date, total project capital expenditure in infrastructure sector in India during the fiscals 2020 to 2025 is projected at over Rs102,00,000 crore.

During the fiscals 2020 to 2025, sectors such as energy (24 per cent), roads (19 per cent), urban (16 per cent), and railways (13 per cent) account for around 70 per cent of the projected capital expenditure in infrastructure in India. The detailed sector wise break-up of the pipeline is as follows:

Out of the total expected capital expenditure of Rs1,02,00,000 crore, projects worth Rs42,70,000 crore (42 per cent) are under implementation, projects worth Rs32,70,000 crore (32 per cent) are in conceptualisation stage and the rest are under development. It is expected that projects of certain states that 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.

In the past decade (FY 2008-17), India invested about $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, finance minister Nirmala Sitharaman said while unveiling the report on Monday.