Govt task force projects Rs 111 lakh cr infrastructure investment over five years to FY2025: Finance ministry

New Delhi: To augment infrastructure and create jobs in the country, a government task force has projected total investment of Rs 111 lakh crore in infra projects over five years, the Finance Ministry said on Wednesday.

The final report of the task force on National Infrastructure Pipeline (NIP) for 2019-2025 presented to Finance Minister Nirmala Sitharaman suggested steps like deepening bond markets, setting up of development financial institutions and land monetisation to meet the funding needs, the ministry said in a statement.

The task force was set up following Prime Minister Narendra Modi Independence Day speech of 2019 where he alluded to an investment of Rs 100 lakh crore in infrastructure.

Representational image. Reuters.

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"For the development of modern infrastructure, an amount of Rs 100 lakh crore has been earmarked for this period which will create new job opportunities besides improving the living standards," Modi had said.

Headed by Economic Affairs Secretary Atanu Chakraborty, the task force in its final report has suggested setting up for three committees for monitoring, implementation and funding of infrastructure projects.

The task force in its initial report released in December had projected an investment of Rs 102 lakh crore in various projects to be implemented in the next five years.

The final report of NIP Task Force is projecting total infrastructure investment of Rs 111 lakh crore during the period FY 2020-25 in light of additional/amended data provided by Central Ministries/State Governments since the release of summary NIP Report, it said.

"Out of the total expected capital expenditure of Rs 111 lakh crore, projects worth Rs 44 lakh crore (40 percent of NIP) are under implementation, projects worth Rs 33 lakh crore (30 percent) are at conceptual stage and projects worth Rs 22 lakh crore (20 percent) are under development Information regarding project stage is unavailable for projects worth Rs 11 lakh crore (10 percent)," it said.

Sectors such as energy (24 percent), roads (18 percent), urban (17 percent) and railways (12 percent) amount to around 71 percent of the projected infrastructure investments in India, it said.

The Centre (39 percent) and States (40 percent) are expected to have an almost equal share in implementing the NIP in India, followed by the private sector (21 percent), it said.

"The final report identifies and highlights recent infrastructure trends in India as well as global in all sectors of infrastructure. It also captures sector progress, deficits and challenges. In addition to updating existing sectoral policies, the Final Report also identifies and highlights a set of reforms to scale up and propel infrastructure investments in various sectors throughout the country," it said.

NIP is a first-of-its-kind, whole-of-government exercise to provide world-class infrastructure across the country and improve the quality of life for all citizens.

It aims to improve project preparation, attract investments (both domestic and foreign) into infrastructure, and will be crucial for the target of becoming a USD 5 trillion economy by FY 2025, it said.

The report also has suggested ways and means of financing the NIP through deepening Corporate Bond markets, including those of Municipal Bonds, setting up Development Financial Institutions for the infrastructure sector, accelerating Monetisation of Infrastructure Assets, Land monetisation, etc, it said.

It further said, while basic monitoring will vest with the Finance Ministry and project agency, there is a need for a higher level of monitoring on reforms to be undertaken and to deal with issues of stalled projects.

The NIP project database would be hosted on India Investment Grid (IIG) shortly to provide visibility to the NIP and help in its financing with prospective investors; domestic and foreign, able to access updated project-level information, it said.

Each line Ministry/State would further add new projects and update their respective project details at pre-defined time intervals so that updated data is available to prospective investors, it added.

The NIP has been made on a best effort basis by aggregating the information provided by various stakeholders including line ministries, departments, state governments and private sector across infrastructure sub-sectors identified in the Harmonised Master List of Infrastructure.

To draw up the NIP, a bottom-up approach was adopted wherein all projects (Greenfield or Brownfield, Under Implementation or under conceptualisation) costing greater than Rs 100 crore per project were sought to be captured, it said.

As per the draft report projects worth Rs 19.5 lakh crore to be implemented during the current fiscal, followed by Rs 19 lakh crore in 2021-22. In the remaining three years, it would be Rs 13.8 lakh crore during 2022-23, Rs 12.8 lakh crore in 2023-24 while Rs 11.1 lakh crore in the terminal year of 2024-25.

On the financing, the Finance Minister in December had said, the government will look at deepening of the debt market and alternative investment funds which will provide the bulk of the debt financing necessary for this.

"We are looking at various steps to reform the PPP based contracts which have to be implemented. Dispute resolution related, enforcement of contracts which is a very critical component, all this is also being looked at when we''re talking about reforming the entire process as per the suggestion was given by various sub-groups under the task force," she had said.

She also announced that the first edition of Annual Global Investors' Meet will be held in the second half of the coming year to meet investors at a single platform.