|Demand of the question|
Introduction. What is National Infrastructure Pipeline?
Body. Discuss its need and significance.
Conclusion. Way forward.
The National Infrastructure Pipeline consists of the projects and programmes with a total allocation of INR 102 lakh crore for infrastructure development in the next five years. It is in accordance with the government’s vision to make India a $5 trillion economy by 2024-25. NIP includes economic and social infrastructure projects in sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.
Need of National Infrastructure Pipeline (NIP):
- $5 trillion goal: 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. This challenge is to be tackled by National Infrastructure Pipeline so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy.
- Inclusive growth: Availability of quality infrastructure is a prerequisite to achieve broad-based and inclusive growth on a sustainable basis.
- Poor infrastructure: India’s growth potential has not been achieved mainly due to poor infrastructure in various sectors. National Infrastructure Pipeline would help in Improving the infrastructure and realising the growth potential.
- Investment: India can’t achieve high growth without investment. NIP 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.
Significance of National Infrastructure Pipeline (NIP):
- Economic growth: It is estimated that India would need to spend $4.5 trillion on infrastructure by 2030 to sustain its growth rate. The endeavour of the National Infrastructure Pipeline (NIP), is to make this happen in an efficient manner.
- Employment: Well-planned NIP will enable more infrastructure projects, grow businesses, create jobs, improve ease of living, and provide equitable access to infrastructure for all, making growth more inclusive.
- Fiscal space: 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.
- BetterProjects: National Infrastructure Pipeline will ensure that infrastructure projects are adequately prepared and launched. 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.
- Agricultural benefits: It will strengthen agricultural and rural infrastructure. Irrigation and rural infrastructure projects would account for 7.7 lakh crore each.
- Connectivity: It will further increase the connectivity in India, especially in rural areas. Road projects will account for Rs. 19.63 lakh crore while another Rs. 13.68 lakh crore would be for railway projects.
- Credit: There is a lack of private investment due to ongoing NPA crisis and lack of credit creation in the economy. So the government needs to invest from its own resources to give a push to the economy
- Banks are recovering from NPA problem. If they are pushed to fund for NIP, they may further face NPA crisis.
- Scale of pipeline is massive and its implementation will not be easy. Coordination among various levels of government is a must.
- Land acquisition is a big challenge for completion of infrastructure projects. Rehabilitation of millions of people will also be not easy.
The National Infrastructure Pipeline is an ambitious plan that would include greenfield and brownfield projects costing above Rs 100 crore each. It 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. Thus, it may help in realising India’s $5 trillion economy dream.