Economic Survey 2020: India needs to spend $1.4 trillion on infrastructure during FY2020-2025 to reach $5 trillion economy

New Delhi: To spur economic growth and achieve $5 trillion economy, India needs to spend about $1.4 trillion on the infrastructure sector during FY2020-2025, the Economic Survey tabled in Parliament said on Friday.

Investment in infrastructure is necessary for the economy, as power shortages, inadequate transport and poor connectivity affects overall growth performance, as per the Economic Survey 2019-20, tabled in Parliament by Union Finance and Corporate Affairs Minister Nirmala Sitharaman.

"To achieve GDP of $5 trillion by 2024–2025, India needs to spend about $1.4 trillion (Rs 100 lakh crore) over these years on infrastructure so that lack of infrastructure does not become a constraint to the growth of Indian economy.

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

As per the National Infrastructure Pipeline (NIP), Central Government (39 percent) and State Government (39 percent) are expected to have equal share of funding of the projects followed by the private sector (22 percent).

Representational image. Reuters

Projects worth Rs 42.7 lakh crore are under implementation.

The Economic Survey noted that, road transport is the dominant mode of transportation. In 2017-2018 the share of transport sector in the Gross Value Added (GVA) was about 4.77 percent of which the share of road transport is 3.06 percent, followed by Railways (0.75 percent), air transport (0.15 percent) and water transport (0.06 percent).

Total investment in the roads and highways sector has gone up more than 3 times in five year period of 2014-15 to 2018-19, it said.

The Survey marked that during the year 2018-19, Indian Railways carried 120 crore tones of freight and 840 crore passenger making it the world's largest passenger carrier and fourth largest freight carrier.

Taking a comprehensive view of Civil Aviation, the Survey observed that India has 136 commercially managed airports by Airport Authority of India and 6 under Public Private Partnerships for operation, maintenance and development of airports.

A total 43 airports have been operationalised since the scheme for operationalizing unserved airports was taken up.

To ease the strain on existing airport capacities, 100 more airports are to be made operational by FY 2023-24, the Survey said adding to continue with the high growth trajectory the government has been providing a congenial environment so that Indian carriers double their fleet from about 680 aircraft at the close of 2019 to 1200 by FY 2023-24.

About shipping sector, the Economic Survey stated that around 95 percent of India's trade by volume and 68 percent in terms of value is transported by sea. As on September 30, 2019 India had a fleet strength of 1,419 ships.

The major ports in the country have an installed capacity of 1514.09 million tonne per annum (MTPA) as on March 2019 and handled traffic of 699.09 MT during 2018-19.

The Survey said the Ministry of Shipping is striving to improve operational efficiencies through mechanisation, digitisation and process simplification. The average turnaround time in 2018 improved to 59.51 hours as against 64.43 hours in 2017-18.

The Survey said universal electrification progress has been made in generation and transmission of electricity. The installed capacity has increased from 3,56,100 MW in March 2019, to 3,64,960 MW as on October 31 2019.

The Survey underlined that access to electricity is necessary for making growth inclusive and for promoting ease of living.

Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA) was launched on September 25, 2017 with an outlay of Rs 16,320 crore to achieve universal household electrification by providing last mile connectivity by 31-03-2019.

The Survey observed that except for few households in Left Wing Extremism affected Bastar Region of Chhattisgarh, all the states have reported electrification of all households on the SAUBHAGYA portal.

On Mining sector it said there has been a notable turnaround in mineral production because of policy reforms and production of major minerals during the year 2018-19 has recorded a growth of 25 percent when compared to last year in terms of value.

While giving a overview of the construction sector the Survey said it accounts for 8.24 percent of GDP which includes housing and employs about 12 percent of the work force.

The Pradhan Mantri Awaas Yojana–Urban (PMAY-U) launched in June 2015, the Survey said, is one of the largest housing schemes of the world covering entire urban India and is being implemented through four verticals.

The scheme is moving towards achieving the vision of "pucca" house to every household by 2020, it said adding 32 lakh houses have been completed and delivered.

The Survey noted that since the launch of the Smart City Mission in 100 cities 5,151 projects worth more than Rs 2 lakh crore are at various stages of implementation and added a total of 1,290 projects worth Rs 22,569 crores have been completed and are operational.