Mumbai: The new government’s investment in railways – which includes dedicated freight corridors, bullet trains and station modernization – will cross ₹12 trillion in its second term, a report by credit ratings agency ICRA has said. The roads and highways sector, where ICRA’s expenditure estimate is in the range of ₹7-9 trillion, is a close second.
Urban infrastructure, ports, airports and inland waterways will account for another ₹9-10 trillion over the five-year term, it estimated.
Shubham Jain, Vice-President and Group Head, Corporate Ratings, ICRA said, “The Government had implemented various de-bottlenecking measures which helped ramp-up the execution in the last five years. Nevertheless, the proposed scale-up of infrastructure investment is certainly very ambitious and challenging. Further, large increase in capital investments in the infrastructure sector will require significant Government push in the form of policy reforms including providing a conducive environment for public private partnership, and promoting alternate avenues of fund raising like Infrastructure Investment Trusts, NIIF, etc., as well as a major increase in public sector spending which given the fiscal constraints can be achieved by way of asset monetisation or asset recycling."
The Bharatiya Janata Party’s (BJP) promise to invest ₹100 trillion in infrastructure over the next five years has fired up optimism in the sector, especially given the party’s landslide victory in the recently concluded Lok Sabha elections. In order to boost the economy and job creation, the government needs to keep investing in infrastructure, particularly urban infrastructure, smart cities, electric vehicle charging stations, upgradation of public transportation - all of these are expected to draw investments, the industry expects.
For the railways, the BJP’s election manifesto had proposed a conversion of all viable rail tracks to broad gauge, electrification of all railway tracks, and completion of the two dedicated freight corridor projects by 2022. Further, a large investment was also envisaged towards modernization of railway stations across the country.
A significant investment was also proposed for metro, airport, ports and inland waterways. The metro rail infrastructure was aimed to be taken to 50 cities from around 20 cities where the metro rail project has been approved so far. With regard to airport infrastructure, the target was to double the number of functional airports from around 101 currently. Similarly, port capacity was aimed to be doubled over the next five years and the development of inland waterways was another potential area that will attract public investment, the report said.