Union Minister of Finance Nirmala Sitharaman on 31 December 2019 unveiled a plan to invest Rs 102 lakh crore over five years to develop social and economic infrastructure to boost overall growth in India and help the economy reach the USD five trillion target by 2024-25.
To achieve this goal, a Task Force was incorporated to draw up the National Infrastructure Pipeline (NIP) for each of the years from FY20 to FY25 with approval of the Finance Minister. The first meeting of the Task Force was held in September 2019. The NIP has identified projects across 23 sectors and 18 states and Union Territories, which will be funded over the next five years by the Central and state governments as well as the private sector. Of the proposed projects, 39 percent each will be implemented by the Centre and states, and the rest 22 percent by private companies.
The NIP includes brownfield and greenfield projects by the Centre, states and private sector, and state-owned companies, as well as those under the public-private partnership (PPP) model.
For FY20, annual investment of Rs 13.6 trillion has been estimated. According to projections, Rs 19.5 trillion will be spent in 2020-21, Rs 19 trillion in 2021-22, Rs 13.8 trillion in 2022-23, Rs 12.8 trillion in 2023-24 and Rs 11.1 trillion in 2024-25.
Out of the total expected capital expenditure of Rs 102 lakh crore, projects worth Rs 42.7 lakh crore (42 percent) are under implementation, projects worth Rs 32.7 lakh crore (32 percent) are in conceptualisation stage and the rest are under development. It is expected that projects of certain states, which are yet to communicate their pipelines, will be added to the pipeline in due course.
The sector-wise annual projected capital expenditure during fiscals 2020 to 2025, sectors such as energy (24 percent), urban (16 percent), railways (13 percent) and roads (19 percent) accounted for approximately 70 percent of the projected infrastructure investments in India. The Vision 2025 specifically envisages goals across major sectors.
Some key goals undertaken across major sectors:
The Energy Sector envisages 24×7 clean and low cost power available to all households, industries, commercial businesses, agriculture, etc. The total capacity is aimed at 619 GW. The percentage share includes thermal (50 percent), renewable (39 percent), hydro (nine percent) and nuclear (two percent). There will be substantial increase in per-capita electricity consumption to 1,616 kWh. The renewable energy’s share in consumption will increase to approximately 19 percent.
The Railways Sector has anticipated a healthy private sector participation and will see 30 percent of net cargo volumes and 500 passenger trains will be privatised. Also, 30 percent of 750 stations will be privatised. The Eastern Dedicated Freight Corridor and the Western Dedicated Freight Corridor (DFC) will be fully operational with construction underway of planned DFCs: East-West, North-South, East Coast and South-West. The Mumbai-Ahmedabad High Speed Railway Project to be operational.
The Ports Sector encompasses under Sagarmala, new major and minor ports will be constructed, besides the existing port modernisation and capacity expansion. Overall capacity utilisation of Indian ports to be less than 65 percent of total capacity of around 2.5 billion tonne. It also includes improved hinterland connectivity, port modernisation and computerisation to reduce logistics cost, reduce turnaround time and increase output per ship berth.
The Telecom Sector will see higher internet penetration of more than 80 percent providing seamless connectivity of rural and remote through schemes such as Bharat Net, 5G technology to fuel industry growth and innovation, harnessing the power of emerging digital technologies, such as IoT, cloud, AI and Big Data, payment gateways, fintech, India to emerge as data-centre hub fuelling growth of Fintech, ecommerce, OTT sectors, etc.
The Irrigation Sector envisaged higher irrigation coverage with a total irrigated land to be approx 85 million ha (approx 61 percent of total). Reduced dependence on rains to improve farmers’ incomes and consumption levels, and emphasis on efficient methods of irrigation. Micro irrigation to cover 28 percent of total NIA, leading to efficient use of scarce water.
The Task Force Report has duly mentioned in detail general reforms to ramp up infrastructure investments in various sectors throughout the country. It is critical to introduce a set of general reforms and also update the existing sectoral policies and reforms. A project monitoring framework has also been suggested to track and map the projects for timely completion.