Private Investment in Infrastructure Sector

The Government has taken several steps to encourage investment by private sector for development of infrastructure like launching of innovative financial vehicles such as Infrastructure Debt Funds, Infrastructure Investment Trusts/Real Estate Investment Trusts, laying down a framework for issuance of municipal bonds, relaxation in External Commercial Borrowing (ECB) norms, mainstreaming of Public Private Partnerships (PPPs) across infrastructure sectors, periodical review of Harmonized Master List of Infrastructure Sub-sectors, establishment of National Investment and Infrastructure Fund (NIIF), relaxation of norms for Employees' Provident Funds Organization (EPFO)/pension funds for infrastructure sector, bringing in 5/25 scheme to extend long tenor loans to infrastructure projects, take-out finance and flexible structuring etc. Further, higher budgetary allocations to infrastructure sectors have been made in recent years. The total outlay for infrastructure in Budget 2018-19 stands at Rs.5.97 lakh crore.

As per NITI Aayog, the revised projection for investment in infrastructure that include electricity, renewable energy, roads & bridges, telecommunications, railways, mass rapid transit system, irrigation (including watershed), water supply & sanitation, ports (including inland waterways), airports, storage and oil & gas pipelines sectors, in the period 2012-17 is Rs. 38,22,822 crore at current prices, out of which the share of private investment is projected to be about 34% amounting to Rs. 12,81,223 crore at current prices. As per Budget Speech 2018-19, investment requirement in infrastructure is estimated to be in excess of Rs 50 lakh crore.

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