Monday, July 26, 2021

Centre Unveils ‘NIP’ Projects To Catapult India Into A $5 Trillion Economy

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By unveiling the Rs. 102 lakh crore National Infrastructure Pipeline (NIP), the Centre has indicated its commitment to bring about transformational change at social and economic levels in India in the next five years. Although after Independence, there have been several government sponsored projects which have spurred growth and lifted millions of people out of poverty; the NIP envisages not only equitable access to infrastructure for all, but, it also promises to catapult the country into a $ 5trillion economy by 2024-25. An ambitious first of its kind project, NIP also promises job creation and improving ‘ease of living’ by making growth more inclusive and effective.

In his Independence Day speech last year, Prime Minister Narendra Modi had maintained that Rs. 100 lakh crore would be invested on infrastructure over the next five years. To achieve this gigantic task, a Task Force under the chairmanship of Secretary, Department of Economic Affairs was constituted in September 2019. The Task Force identified Rs. 102 lakh crore worth of projects after conducting 70 stakeholder consultations within a span of four months.

From roadways to railways to energy to urban irrigation, mobility, education and health—numerous projects have been identified for investments. Data from the Ministry of Finance shows that under NIP, Rs 2.5 lakh crore have been allocated for port and airport projects, Rs 3.2 lakh crore for digital infra projects, Rs. 16 lakh crore for irrigation, rural, agro and food processing projects. Nearly Rs. 20 lakh crore for roads and Rs. 14 lakh crore for railway projects are lined up under the NIP.

Also, Rs. 25 lakh crore worth of energy projects have been identified under NIP.  What is, however, noteworthy is that out of the total expected capital expenditure of Rs. 102 lakh crore, projects worth Rs 42.7 lakh crore are already under implementation and projects worth Rs 32.7 lakh crore are in conceptualization stage and the rest are under development.

Though ensuring timely implementation of these projects which are spread across several states and Union Territories is challenging, the government is much energized by its commitment to serve the nation and its people. The targets would be completed under mission mode. To complete all projects in the next five years, a robust monitoring mechanism would also be established.

While this shows the government’s intention to put in place checks and balances, it must be remembered that NIP projects are not completely the central government owned. Rather, various state governments and private sector (including foreign players) would also be important stakeholders in the NIP projects. While the central government and state governments will have an equal share of 39 per cent each in NIP, the private sector will have 22 per cent share, which the government expects to increase to 30 per cent by 2025.

The aim is to have well-developed infrastructure across the country. Once that is in place, it has the potential to enhance the country’s economic activity, create additional fiscal space by improving revenue base of the government and ensure quality of expenditure focused in productive areas. Arguably, NIP can be a suitable answer to the slowdown which has left no country untouched by its negative impact.

By 2030, India will require $4.5 trillion worth of investment on infrastructure to achieve 8 per cent or above economic growth and also to do away with unemployment scenario, thus, making citizens’ life happy and prosperous. NIP has the potential to make this happen in an efficient manner. In fact, availability of quality infrastructure is a pre-requisite to achieve broad-based and inclusive growth on a long term basis. It should be borne in mind that timely completion of the NIP projects would have a positive effect on the nation’s socio-economic milieu. If the centre has decided to go ahead with pro-growth linking initiatives despite constraints and challenges, the move needs to be welcomed with open arms by people from all walks of life.

Script:  Shankar Kumar, Journalist

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