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The Government of India’s Infrastructure Investment Proposal


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Infrastructure Investment Proposal of The Government of India

During a recent conference, Finance Minister (FM) Nirmala Sitharaman revealed that in a span of 4 months, she and her task force had held 70 meetings with various stakeholders engaged in various sectors. Following these meetings, her task force has identified a number of National Infrastructure Projects worth Rs. 102 lakh crores. She further stated that in the coming few weeks, another 3 lakh crore-worth projects are expected to be added to this list. This means that there are a total of 105 lakh crore-worth of projects in the pipeline. Out of these, the government has already made a commitment for 100 lakh crores . These projects under the aegis of 22 ministries spread across 18 states and union territories, will surely serve as one of the key drivers of economic growth in the country, and enable the government to meet its ambition of transforming India into a $5 trillion economy by 2024-25.

The projects have been classified under two broad categories – economic infrastructure and social infrastructure. The purpose of this classification is two-fold: ease of doing business and ease of living. The National Infrastructure Pipeline (NIP), a booklet prepared by the FM’s task force gives details of these infrastructure projects. Of these, the energy sector’s project share is 24%, followed by roads (19%), urban development (16%) and railways (13%).The share of rural and social infrastructure projects, which include health, education and drinking water is 8% and 3% respectively.

Out of the total expected capital expenditure of Rs 102 lakh crore, projects worth Rs 42.7 lakh crore (approx. 42%) are under implementation while Rs 32.7 lakh crore-worth projects (approx. 32%) are in the conceptualisation stage. For the 19.1 lakh crore (approx. 19%) projects that are under development, the DPR is done but the construction is yet to start. It is expected that in due course, projects of certain states, who are yet to communicate their pipelines, would be added to this national project pipeline.

From an investment perspective, private companies will account for 22%-25% of total investments while the balance will come from the Centre and individual states in equal proportions.

The task force prepared the NIP in record time. The government will examine its recommendations and aim to take speedy action in the coming weeks and months.

Last year, India’s Honourable Prime Minister Shri Narendra Modi stated in his Independence Day speech that India needed to build modern infrastructure to reach international standards and compete effectively on the global stage. In keeping with this exhortation, the government has committed to invest at least 100 lakh crore rupees for setting up modern infrastructure in the country. These projects will create infrastructure, more job opportunities and thus help meet the aspirations of the 100+ crore people who call India ‘home’.

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