The central government recently unveiled the National Infrastructure Pipeline (NIP) with projects worth Rs 102-lakh crore. It aims at ensuring timely implementation of these projects — spread across 18 states and Union Territories — over the next five years. The increased capital expenditure by the government is imperative to fix key infrastructure bottlenecks.
In an interview with CNBC-TV18, Feedback Infra Chairman Vinayak Chatterjee says Rs 100 lakh crore is certainly a practical target, something to grasp and try and achieve. However, public-private partnership (PPP) is an extremely important lever to get infrastructure cracking, he stated.
“I have done a quick reality check and the Rs 100 lakh crore figure passes that test in the sense that the Indian economy has in the past been doing about 6.5-7 percent of its nominal GDP in infrastructure investments. If you use that yardstick you will see that in the next 5-6 years the economy certainly requires Rs 100 lakh crore at a conservative estimate of 6.5-7 percent of GDP,” he observed.
However, Chatterjee noted that it is not enough for India. “The end of the 12th Five Year Plan actually projected about 9 percent of GDP. If you take about 9 percent of GDP then the requirement is not Rs 100 lakh crore, it is Rs 150-170 lakh crore,” he pointed out.
“Immediate steps must be taken to revive PPP. The budget will have some strong policy mentions about revitalising the PPP format, it cannot escape that because a significant part of the budget gap can only be filed with this for greenfield projects. There is no point talking about the foreign pension funds coming into infrastructure because they only come into existing operating assets. While that is useful to unlock capital for somebody, it does not lead to any new construction or demand for steel, cement or jobs. So public-private partnership is an extremely important lever to get infrastructure cracking,” he added.
First Published: Jan 14, 2020 8:50 PM IST
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