The government has set up a task force to identify technically and economically viable infrastructure projects that can be kick started in the current financial year and can be included in the ₹100 trillion plan for the sector in the next five years.
The finance ministry on Saturday said the task force will draw up plan for the ‘national infrastructure pipeline’ from 2019-20 to 2024-25.
The announcement comes at a time when growth has slowed to a six-year low of 5% in April-June, amid sluggish demand, slowdown in automobile sector and job losses. The government has been taking steps to bring India back on the growth trajectory and achieve the target of $5 trillion economy by 2024-25.
“Availability of quality infrastructure is a pre-requisite to achieve broad-based and inclusive growth on a sustainable basis. Investment in infrastructure is also necessary for sustaining the high growth rate of India. To achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs. 100 lakh crore) over these years on infrastructure. ," the finance ministry said in a statement.
The task force, headed by the finance ministry’s economic affairs secretary, along with five other officials from policy think tank NITI Aayog and senior government officials.
The committee will estimate annual infrastructure investment costs, guide the government departments in identifying appropriate sources of financing, suggest measures to monitor the projects so that cost and time overrun is minimized.
“The challenge is to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy," the statement said.
The national infrastructure pipeline will include greenfield and brownfield projects with an estimated cost of more than ₹100 crore each.
“Each ministry/department would be responsible for monitoring of projects so as to ensure their timely and within-cost implementation. The task force will also enable robust marketing of the pipeline of projects requiring private investment through the India Investment Grid (IIG), National Investment & Infrastructure Fund (NIIF), etc," it said.
The task force will submit the report on the plan for 2019-20 by October 31 and on the indicative pipeline for 2021-25 by December 31.
In his Independence Day speech, Prime Minister Narendra Modi had said ₹100 lakh crore will be spent towards infrastructure creation in the country.
The last five years have seen massive spending on roads, railways, water, irrigation and urban infrastructure. Connectivity, both physical and digital, which has a multiplier effect on the economy, is a key development goal for the Modi administration in its second term as it seeks to steer the economy away from unfavourable headwinds to become the fifth largest in the world.