National Infrastructure Pipeline is the investment plan unveiled by the Central Government for enhancing infrastructure in identified sectors for a period of five years from 2020-25.
Finance Minister Nirmala Sitharaman announced Rs 102 lakh crore ($1.4 trillion) National Infrastructure Pipeline to spend in the infrastructure sector over a five-year period (2020-25). The plan will help India to reach $5 trillion economy by 2025.
Funding of the scheme
The funding of the National Infrastructure Pipeline will be jointly made by the Centre, states and the private sector in the proportion of 39:39:22 (39 % each by the centre and states and 22% by the private sector).
The infrastructure plan was proposed by the Taskforce on National Infrastructure Pipeline for 2019-2025. Report of the Task Force was also published by the FM.
The infrastructure investment plan was initiated after PM Modi’s Independence Day speech where he proposed Rs 100 lakh crore investment in infrastructure over the next five years. Following the PM’s vision, the task force was constituted, and it identified different sectors and allocation for Rs 102 lakh crore worth of projects. Another Rs 3 lakh crore projects will be added.
Infrastructure Pipleline -significance
For the next five years (2020-25), $1.4 trillion (Rs 102 lakh crores) will be invested.
India invested $1.1 trillion in infrastructure during 2008-2017.
A task force was appointed on National Infrastructure Pipeline and it recommended Rs 102 lakh crore investment till 2025 besides proposing a vision plan.
Infrastructure investment has a special role during slowdown as it generally helps to revive economic activities.
Utility of infrastructure projects to fight slowdown
Investment in infrastructure is a good strategy to overcome the current slowdown. Governments usually unveils mega infrastructure projects to reactivate the economy when it falls in slowdown. The policy of high government spending in infrastructure energises demand in other sectors and led to more fund flows to various sectors besides creating valuable assets.
It is estimated that India should invest $4.5 trillion in infrastructure by 2030 to support faster growth. The National infrastructure Pipeline is a part of that attempt to invest $4.5 trillion.
|Investment in major sectors under National Infrastructure Pipeline (2020-25)|
|Major heads/Ministry/ Department||Amount to be invested in Rs crores||Percentage share of the sector|
|Agriculture and Food Processing Infrastructure||60,553||1%|
|Total (Rs Crore)||1,02,50,704||100%|
Vision, Strategy of the Infrastructure Pipeline set by the Task Force
The Task Force on National Infrastructure Pipeline that chaired by Secretary, Department of Economic Affairs (DEA), Ministry of Finance (MoF) submitted a detailed report on the infrastructure plan. Main function of the task force was to identify technically feasible and financially/ economically viable infrastructure projects that can be initiated in fiscals 2020 to 2025.
The task force observed that by 2030, around 42% of India’s population would be urbanised from the current 31%. Hence, urban infrastructure is also to be modernised.
Components of Infrastructure Vision 2025
The Taskforce has proposed certain goals, strategies and standards under its Infrastructure Vision 2025. Following are the components of the vision.
(a) Affordable and clean energy
- Ensuring 24×7 power availability;
- Reduce pollution through green and clean renewable energy and environment friendly fuel for transportation.
(b) Digital Services
- Providing access for all.
- 100% population coverage for telecom and high-quality broadband services for socio-economic empowerment of every citizen;
- Digital payments and e governance Infrastructure for delivery of banking and public services
(c) Quality Education:
- World class educational institutes for teaching and research, technology driven learning meeting GER target of 35 by 2025 as per the draft National Education Policy, 2019.
(d) Convenient and efficient transportation and logistics
- Roads: Enhanced road connectivity to remotest areas and trunk connectivity through expressways, major economic corridors, strategic areas and tourist destinations. Extensive charging and on road traction infrastructure for electric vehicles.
- Rail: World-class stations and fully integrated rail network with inter-modal connectivity to remote regions and close to nil accidents.
- Air: Airport and related infrastructure to enable international and regional connectivity so as to achieve passenger and cargo traffic on the vision of NCAP 2016. Air connectivity to all Tier II and most Tier III cities.
- Ports: Port and Waterway infrastructure focused on reducing logistics time and cost for foreign and domestic trade as per the Sagarmala National Perspective Plan 2016.
- Metro-connectivity: Urban mobility MRTS and bus connectivity within 800 metres of homes in more than 50 cities. High standards of living for citizens by providing metro connectivity in at least 25 cities.
(e) Housing and water supply for all
- Housing for all by 2022 PMAY negligible slum population.
- All households to have piped water meeting national standards by 2024.
- Wastewater recycling and treatment.
(f) Disaster-resilient standards compliant public infrastructure
(g) Agriculture infrastructure:
- Increased irrigation and micro irrigation coverage;
- Integrated agro logistics systems from farm gate to end consumers storage, processing and packing, transportation, market and digital infrastructure for agriculture produce.
(h) Good health and well being
- Superior healthcare facilities, electronic health records infrastructure.
- Superior accessible primary, secondary and tertiary healthcare infrastructure facilities across India to meet NHP 2017 goals.
- Medical para medical education infrastructure meeting manpower needs by 2020 and CHVs by 2025 as per IPHS norms.
This vision will help India to achieve Sustainable Development Goals. Similarly, it will help the country to meet the requirements of faster urbanisation. It is expected that by 2030, nearly 42% of the Indian population will be living in urban areas.
Challenges for NIP
The real challenge will be realising the funds required for infrastructure generation. Size of the proposed investment is big compared to previous six year’s completed investment in the infrastructure sector. Centre and the states made an investment of Rs 51 lakh crore during the previous six years according to the Finance Minister. Here, realising Rs 102 billion in the next five years will be a huge task given the precarious fiscal situation of the governments.