New Delhi, Jan 31 The government has laid a special focus on infrastructure -- physical, digital and social -- in the last five years and those efforts would need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country, the Economic Survey 2024-25 said on Friday.
Tabled in the Parliament by Finance Minister Nirmala Sitharaman, the Survey said equally important is that "the private sector must reciprocate, too".
"India's development aspirations require a substantial investment in infrastructure over the next decade. While estimates of the required spending differ in scale, there is general agreement that current infrastructure spending needs to be increased to achieve these objectives," read the document presented in the Parliament, ahead of the Union Budget 2025-26.
In FY25, capital expenditure gathered momentum postelections. The government has recognised the importance of continuing the pace of infrastructure building and the increasing need to promote sustainable construction practices.
"It is also clear that public capital alone cannot meet the demands of upgrading the country’s infrastructure commensurate with the requirements of Viksit Bharat@2047," the Survey document read, highlighting the need to ensure increasing private participation in infrastructure by improving their capacity to conceptualise projects and their confidence in risk and revenue-sharing mechanisms, contract management, conflict resolution and project closure.
India's development aspirations require a substantial investment in infrastructure over the next decade.
Reflecting this intent, the capital expenditure by the Union government on major infrastructure sectors has been increased at a trend rate of 38.8 per cent from FY20 to FY24.
The government has also instituted many complementary mechanisms to expedite planning, clearances and execution of projects.
The National Infrastructure Pipeline (NIP) was launched with a forward-looking approach, targeting a projected infrastructure investment of around Rs 111 lakh crore from FY20 to FY25.
Currently, it encompasses over 9,766 projects and schemes across 37 sub-sectors. These projects are tracked and reviewed through the integrated India Investment Grid (NIP-Project Monitoring Group) portal.
The government is bringing in innovative frameworks for attracting investment in infrastructure projects.
To boost private investment in brownfield assets, the National Monetisation Pipeline (NMP) was launched in August 2021. This initiative laid down the framework for monetisation policy and identified a pipeline of potential core assets with an indicative value of Rs 6 lakh crore for the period FY22 to FY255.
For the period FY22 to FY24, against the target of Rs 4.30 lakh crore, transactions of Rs 3.86 lakh crore in terms of accruals or private investments were completed under the core asset monetisation.
Sector-wise, roads, power, coal, and mines led the performance, supported by market-tested models and reforms. For FY25, the aggregate monetisation target is set at Rs 1.91 lakh crore.
"Despite such earnest efforts by the Union government and quite a few state governments and public sector undertakings supplementing these efforts with increased capex, there is still a significant unmet demand for infrastructure development," said the Survey.
While this is typical of a dynamic, developing economy, India’s goal of ‘Viksit Bharat’ necessitates the progressive filling of this gap with innovative modes of financing and greater private participation, it stressed.
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