Need to scale up infra investment, push private financing to sustain growth: Eco Survey

New Delhi, Jan 31 (PTI) Investment in the infrastructure sector needs to be continuously scaled up over the next two decades to sustain a high growth rate while the government needs to come up with ways to increase private sector financing and tap new avenues to mobilise resources, the Economic Survey said on Friday.

"India needs a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth," said the Economic Survey 2024-25 tabled in Parliament.

In the first quarter of FY25, the constraints on new approvals and spending during the general elections, coupled with heavy monsoon in many regions, affected the progress of the infrastructure spending, said the latest survey.

However, the speed of capex picked up between July and November last year.

The capex in infrastructure sectors is likely to gain further momentum in the remaining months of the current fiscal. On an average, ministries related to infrastructure sectors utilised 60 per cent of the budgeted capex during April to November 2024.

The capacity addition in physical connectivity sectors stayed on course during FY25.

The capital expenditure of the Centre for the current fiscal has been budgeted at about 3.3 times the capex for FY20, the document said.

It further said that disaster-resilient urbanisation, public transport, preservation and upkeep of heritage sites, monuments and tourist destinations, as well as rural public infrastructure, including connectivity, call for greater attention.

"Our net zero commitments entail added stress on creating renewable energy capacities," it added.

Stating that there are binding budget constraints to the different tiers of government, it said private participation should speed up in many critical infrastructure sectors in many ways like programme and project planning, financing, construction, maintenance, monetisation and impact assessment.

"Our infrastructure programme supports a variety of PPP models like build-operate-transfer (toll and annuity), design-build-finance-operate-transfer, hybrid annuity model and toll-operate-transfer," it said.

The government has instituted many debottlenecking and facilitatory mechanisms like the National Infrastructure Pipeline, National Monetisation Pipeline and PM-Gati Sakti that have made progress.

Financial market regulators have introduced reforms to encourage private participation, it said, adding that still the uptake of private enterprise is limited in many core sectors.

The strategy to step up private participation needs coordinated action of all stakeholders involved like governments at different tiers, financial market players, project management experts and planners, and the private sector.

"Capacities to conceptualise projects, develop sector-specific innovative strategies for execution, and, develop high-expertise areas such as risk and revenue sharing, contract management, conflict resolution and project closure need to improve substantially," it said.

The efforts of the Centre need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country.

The survey further said that during the current fiscal so far, the progress in the expansion of the railway network stayed at levels comparable to the previous year, while the addition of rolling stock increased considerably. Between April and October last year, 17 new pairs of Vande Bharat trains were introduced to the network, and 228 coaches were produced.

With regard to the road networks, the survey said that the length of National Highways (four-lane and above) which excludes National High-Speed Corridors grew by approximately 2.5 times from about 18,300 km to 45,900 km in the last ten years.

It further said that airport operators and developers, including the Airports Authority of India, are pursuing a capital expenditure plan exceeding Rs 91,000 crore from FY20 to FY25. About 91 per cent of this has been achieved by November 2024.

New airports and improved regional connectivity under the Ude Desh ka Aam Naagrik (UDAN) scheme have improved air connectivity considerably.

Under the Regional Connectivity Scheme UDAN, 619 routes connecting 88 airports, including two water aerodromes and 13 heliports, have been operationalised so far.

The airport's cargo handling capacity has been gradually increasing.

Port capacity has improved significantly in the current fiscal, leading to improvements in operational efficiency and reduction in average container turnaround time.

The power sector network continues to expand, with installed capacity increasing to 456.7 GW as of November 2024. The addition of transformation capacity also gained momentum this year. However, the addition of transmission lines was affected by the heavy monsoon conditions.

The survey further said that he roll-out of 5G services, along with the introduction of new policies aimed at enhancing telecommunications infrastructure and user experience, has played a crucial role in digital connectivity.

By October 31, 2024, 5G services were launched in all states and Union Territories. Currently, 5G services are available in 779 out of 783 districts. Over 4.6 lakh 5G Base Transceiver Stations (BTSs) have been installed nationwide.

On rural infrastructure, the survey said that when The Jal Jeevan Mission (JJM) which aims to ensure long-term water security for rural households by providing reliable access to safe piped drinking water was launched in August 2019, only 3.23 crore of rural households had tap water connections.

Since then, over 12.06 crore families have been added, increasing the total to more than 15.30 crore out of approximately 19.34 crore rural households as of November 26, 2024. PTI SID HVA

Source: PTI