In a major boost to scaling up infrastructure investment, the government has announced projects worth Rs 102 lakh crore spread across 18 state and union territories. Finance Minister Nirmala Sitharaman said 63 percent of these projects in the pipeline are already firmed up.
The FM added that these projects are spread across 22 ministries and the government will issue an annual supplementary report every year detailing the status of these projects.
The infra project pipeline will focus on areas including power, railways, irrigation, health, water, education, mobility, and the digital sector.
Raghav Chandra, Former Chairman of NHAI, Vijay Chibber, former secretary of Road transport highway, and Renu Baid, Vice President Research, IIFL Institutional Equities give their take on these announcements.
Vijay Chibber said, “When we look at actual figures the last five years only Rs 51 lakh crore and then they want to ramp this up to about Rs 105 lakh crore. So it is a bit of a task in terms of government liquidity positions currently. I will say a step-up from 22 percent of private-sector share to 30 percent is a pointer in a right direction. I would have thought that a little more effort would have gone into providing space for the private sector in the infrastructure bill because government finance is certainly not going to be that readily available.”
Former NHAI Chairman Raghav Chandra said, “22 percent current spending by the private sector would be ramped up to 30 percent by 2025. This will require considerable incentivisation of the private sector to get its act together. One of the critical issues that I anticipate is making finance available for the private sector today. They are finding it difficult to get suitable funding.”
Renu Baid said, “I think it is a positive move. There was skepticism that because of paucity of government funds there could be issues in terms of infra capex and ordering slowing down. Clearly government coming out and talking about their medium to long term plans on infrastructure investment bodes well for the companies.”