The government has placed a special focus on infrastructure—physical, digital, and social—over the last five years, and these efforts must be complemented by a wholehearted acceptance of public-private partnerships (PPP) in infrastructure across the country, the Economic Survey 2024-25 stated on Friday.
Presented in Parliament by Finance Minister Nirmala Sitharaman, the Survey further emphasized that "as important as this is, the private sector must reciprocate, too."
It highlighted that India's development aspirations require significant infrastructure investment over the next decade. While estimates of the required expenditure vary, there is consensus that current infrastructure spending needs to be increased to meet these objectives. In FY25, capital expenditure gained momentum following the elections.
The government has recognized the need to maintain the pace of infrastructure development while also promoting sustainable construction practices. "It is also clear that public capital alone cannot meet the demands of upgrading the country's infrastructure in line with the requirements of Viksit Bharat@2047," the Survey stated. It underscored the importance of encouraging private participation by enhancing their ability to conceptualize projects and fostering confidence in risk-sharing, revenue-sharing mechanisms, contract management, conflict resolution, and project closure.
India’s development ambitions require substantial infrastructure investments over the next decade. In line with this, the Union government's capital expenditure on major infrastructure sectors increased at a trend rate of 38.8% from FY20 to FY24.
Additionally, several mechanisms have been put in place to accelerate planning, clearances, and project execution. With a forward-looking approach, the government launched the National Infrastructure Pipeline (NIP), which aims to mobilize approximately Rs 111 lakh crore in infrastructure investments between FY20 and FY25. Currently, it includes over 9,766 projects and schemes spanning 37 sub-sectors, all of which are monitored and reviewed on the integrated India Investment Grid (NIP-Project Monitoring Group) portal.
To attract private investment in infrastructure, the government introduced new investment frameworks. The National Monetisation Pipeline (NMP) was launched in August 2021 to enhance private investment in brownfield assets. This initiative established a structured monetization policy and identified a pipeline of core assets valued at an indicative Rs 6 lakh crore for FY22 to FY25.
Between FY22 and FY24, core asset monetization successfully executed transactions worth Rs 3.86 lakh crore in private investments, against a target of Rs 4.30 lakh crore. The sectors performing strongly in this initiative include roads, power, coal, and mines, supported by well-tested market models and policy reforms. For FY25, the aggregate monetization target is set at Rs 1.91 lakh crore.
Despite the sincere efforts of the Union government, along with several state governments and public sector undertakings (PSUs) increasing their capital expenditure, a significant infrastructure gap remains. The Survey noted that while such a gap is common in a dynamic, developing economy, India's vision of Viksit Bharat calls for progressively closing this gap through innovative financing methods and greater private participation.
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