The Centre on Tuesday unveiled the National Infrastructure Pipeline (NIP) with projects worth ₹102-lakh crore. It aims to ensure timely implementation of these projects — spread across 18 States and Union Territories — over the next five years.
The government expects that with more and more States/UTs submitting their proposals, another ₹3-lakh crore will be added to the total expenditure in the next few days. Of the capex to be undertaken for the infra sector, the Centre (39 per cent) and States (39 per cent) are to have an equal share, with the private sector chipping the rest (22 per cent). The Centre expects the private sector’s share to go up to 30 per cent by 2025.
From FY20 to FY25, sectors such as energy (24 per cent), roads (19 per cent), urban development (16 per cent) and railways (13 per cent) will take up around 70 per cent of the projected capex. Out of the total expected capex of ₹102-lakh crore, projects worth ₹42.7-lakh crore (42 per cent) are under implementation, while those worth ₹32.7-lakh crore (32 per cent) are in the conceptualisation stage, and the rest are under development. States that are yet to communicate their respective pipeline plans are expected to do so in due course.
Flexibility is key
A key feature of this pipeline is flexibility. This means ‘laggard’ projects will be dropped from the pipeline. “As we go along, considering the prospects and challenges of each project, there will be the flexibility of dropping a project and picking up a new one so that there are no laggards,” Finance Minister Nirmala Sitharaman said while unveiling the plan here on Tuesday.
The list of projects is part of a report prepared by a task force under the chairmanship of the Economic Affairs Secretary.
To achieve a $5-trillion economy by FY25, India needs to spend about $1.4 trillion (₹100-lakh crore) till then on infrastructure. The endeavour of the NIP is to make this happen in an efficient manner, Sitharaman said, adding that it will give a boost to infrastructure projects besides creating jobs, improving ease of living, and providing equitable access to infrastructure for all, thereby making growth more inclusive.
From FY08 to FY17, India invested about $1.1 trillion in infrastructure. The challenge is to step up the annual investment in the sector so that lack of infrastructure does not impede the growth of the economy, said Sitharaman. She indicated that the Centre will examine the recommendations of the task force and take early action.
Task force report
Prime Minister Narendra Modi, in his Independence Day speech this year, highlighted that ₹100-lakh crore would be invested in infrastructure over the next five years, including in social and economic infrastructure projects. To achieve this objective, a task force was constituted to draw up the pipeline for each of the years from FY20 to FY25 with the approval of the Finance Minister.
This exercise, the first of its kind, is expected to be followed up by a periodical review process.
The task force, in its detailed report, gave recommendations on changes required to several key sectoral policies. It also highlighted other reform initiatives to be take up by the Central and State governments. A monitoring mechanism has also been suggested to ensure timely implementation.