Pvt sector share in National Infra Pipeline to hit 30% by 2025: Eco Survey

Two-thirds of the pipeline is already firmed up; projects of certain states likely to be added to in due course

The share of the private sector in the National Infrastructure Pipeline (NIP) is likely to touch 30 per cent by 2025, Chief Economic Advisor Krishnamurthy Subramanian said in the Economic Survey 2020 tabled by Finance Minister Nirmala Sitharaman in Parliament on Friday.

Investment in Infrastructure is necessary for growth. To achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs 100 trillion) over these years on infrastructure.

The challenge is to step-up annual investment so that lack of infrastructure does not become a binding constraint to the growth of the Indian economy, he said, adding that to implement an infrastructure programme of this scale, it is important that projects are adequately prepared and launched.

On December 31, Sitharaman announced a pipeline of Rs 19.63 trillion worth of road projects.

As per the NIP, Central Government (39 per cent) and State Government (39 per cent) are expected to have equal share in funding of the projects followed by the Private Sector (22 per cent).

To draw up the NIP for each of the years from FY 2019-20 to FY 2024-25, an inter-ministerial Task Force was set up in September 2019 under the chairmanship of Secretary (DEA), Ministry of Finance.

NIP is expected to enable well-prepared projects which will create jobs, improve ease of living, and provide equitable access to infrastructure for all, thereby making growth more inclusive.

NIP also intends to facilitate supply side interventions in infrastructure development to boost short-term as well as the potential GDP growth. Improved infrastructure capacities will also drive competitiveness of the Indian economy.

The NIP has projected total infrastructure investment of Rs 1.02 trillion during the period FY20 to FY25 in India. Energy (24 per cent), roads (19 per cent), urban (16 per cent), and railways (13 per cent) amount to over 70 per cent of the projected capital expenditure during the said period.

Out of the total expected capital expenditure, projects worth Rs 42.7 trillion are under implementation, others worth Rs 32.7 trillion are in conceptualisation stage and rest are under development.

Hence about two-thirds of the pipeline is already firmed up. It is also expected that projects of certain states would be added to the pipeline in due course, Subramanian said.

As part of the infrastructure vision 2025, the government has envisaged enhanced road connectivity to remotest areas and trunk connectivity through expressways, major economic corridors, strategic areas and tourist destinations.