National Infra Pipeline final report doesn't account for Covid-19 slowdown

Copy-pastes optimistic statements from interim report but removes GDP projections

The final report by the task force on the National Infrastructure Pipeline was made public, on Thursday, in an environment far removed from the one in which Finance Minister Nirmala Sitharaman launched the pipeline and released an interim report on December 31.

Yet, the final report contains the exact same optimistic lines of economic growth going ahead. The only change from the interim and final reports, on growth, is that the final report does not have nominal gross domestic product growth estimates, which were there in the interim report but removed from the final report.

“We expect India’s GDP to recover in the five years beginning fiscal 2021 (2020-21 to 2024-25),” the report states, an assessment carried over from the interim report, which was in a pre-Covid-19 world.

In fact, Covid-19, and its impact on India’s economic growth, the centre and states’ capital spending, impact on labour and on infrastructure projects has not been mentioned anywhere in the report.

Elsewhere in the report, the taskforce has stated: “India’s GDP is expected to gradually move upwards in the five years starting from fiscal 2020 anchored on the clean-up of financial sector balance sheets, reversing the deleveraging phase with corporates starting to leverage for funding capex, leading to growth and payoff from policies and reforms such as Goods and Services Tax and Insolvency and Bankruptcy Code, 2016.”

“Capacity utilisation is expected to catch up, resulting in an improvement in the investment cycle. It is a given that infrastructure development is a critical factor for boosting the economy, providing improved growth prospects,” it states.

The interim report, released on December 31, had projected nominal gross domestic product for 2020-21 to grow 10.5 per cent compared with revised estimates for 2019-20. For 2024-25, the report had projected nominal GDP of Rs 365.5 trillion. Reaching that mark would require an average nominal GDP growth rate of 12.2 per cent annually from 2020-21 to 2024-25.

The 2020-21 Union Budget had projected nominal growth for the year at 10 per cent, and the 2019-20 Economic Survey had projected real GDP growth of 6-6.5 per cent. With the pandemic and the resultant nationwide lockdown, all of the budgetary estimates now stand null and void. The centre has admitted that it needs to come out with new projections, but will do so only after there is some stability in forecasts.