Finance Minister unveils ₹102 lakh crore national infrastructure plan

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News:Finance Minister has released a report of task force on National Infrastructure on Pipeline(NIP) 2019-2025.

Facts:

About National Infrastructure on Pipeline(NIP) Task force:

  • The Central Government had constituted a task force to draw up a National Infrastructure Pipeline(NIP) from 2019-20 to 2024-25.
  • The Task Force has been chaired by the Secretary, Department of Economic Affairs,Ministry of Finance.
  • The task force has prepared a roadmap as it is estimated that India would need to spend $4.5 trillion on infrastructure by 2030 to sustain its growth rate.
  • Hence,the endeavour of the NIP is to make this happen in an efficient manner.

Key Highlights from the report:

  • The task force unveiled the National Infrastructure Pipeline(NIP) with projects worth ₹102-lakh crore.
  • The private companies will account for 22%-25% of the investments and the balance will come from the Centre and the states in equal proportions.
  • The projects have been classified under two broad categories namely economic infrastructure and social infrastructure for both ease of doing business and ease of living.
  • Under the projects,energy sectors make up the lion’s share of 24%, followed by roads(19%), urban development(16%) and the railways (13%). 
  • The shares of rural and social infrastructure projects which includes health, education and drinking water is 8% and 3% respectively.

Significance of NIP:

  • Economy: A well planned NIP will enable more infrastructure projects, grow businesses, create jobs, improve ease of living and provide equitable access to infrastructure for all by making growth more inclusive.
  • Government: A well developed infrastructure enhances level of economic activity, creates additional fiscal space by improving revenue base of the government, and ensures quality of expenditure focused on productive areas. 
  • Developers: It will provide better view of project supply, provides time to be better prepared for project bidding, reduces aggressive bids/ failure in project delivery, ensures enhanced access to sources of finance as a result of increased investor confidence. 
  • Banks/financial institutions (F1s)/investors: It will build investor confidence as identified projects are likely to be better prepared, exposures less likely to suffer stress given active project monitoring, thereby less likelihood of NPAs.