India needs $4.5 trillion by 2040 for infrastructure development: Economic Survey
The Economic Survey stressed the need to fill the infrastructure investment gap by financing from private investment, institutions dedicated for infrastructure financing like National Infrastructure Investment Bank and Asian Infrastructure Investment Bank.
India will need about $4.5 trillion in the next 25 years for infrastructure development, of which it will be able to garner about $3.9 trillion, the Economic Survey said Monday.
“The Global Infrastructure Outlook reflects that rising income levels and economic prosperity is likely to further drive demand for infrastructure investment in India over the next 25 years.
“Around $4.5 trillion worth of investments are required by India till 2040 to develop infrastructure to improve economic growth and community well being,” the survey tabled by finance minister Arun Jaitley in Parliament said Monday.
It said the current trend shows that India can meet around $3.9 trillion infrastructure investment out of $4.5 trillion.
“The cumulative figure for India’s infrastructure investment gap would be around $526 billion by 2040,” it said. The Global infrastructure outlook shows that the gap between required infrastructure investment and current trend of investment is expected to be widened over the year,” it said.
The Survey stressed the need to fill the infrastructure investment gap by financing from private investment, institutions dedicated for infrastructure financing like National Infrastructure Investment Bank (NIIB) and also global institutions like Asian Infrastructure Investment Bank (AIIB) and New Development Bank (erstwhile BRICS Bank).
Stating that there was massive underinvestment in the sector, it attributed the causes behind this to “collapse of Public Private Partnership (PPP) especially in power and telecom projects; stressed balance sheet of private companies; issues related to land & forest clearances.”
Terming road transport as a dominant mode of transport in India which contributes significantly to the national economy, the Survey said measures to boost it resulted augmenting of the road length to 5.717 million km from 3.373 million km in 2001 while the vehicles grew by four times to 229 million during the period.
Also, it emphasised that India’s road density at 1.66 km/sq km of area is higher than that of Japan, USA, China, Brazil and Russian Federation while surface road length was 61% of the total road lento, much lower than the UK, Korea, Russia and China.
It also highlighted that as on September 2017, out of the 1,263 total ongoing monitored projects across sectors, there are 482 projects in Road Transport and Highways with a cost of Rs 3,17,373.9 crore. Of these, 43 projects face cost overruns and 74 projects time overruns.
About railways sector, the Survey said that it is facing stiff competition from other modes of transportation and the government is initiating various transformative measures to keep railways on track.
About metro rail, it said there are 425 km of metro rail systems operational in the cities of Delhi, Noida, Gurugram, Kolkata, Mumbai, Chennai, Bengaluru, Hyderabad, Jaipur, Lucknow and Kochi and another about 684 km are under construction in various cities by December 2017.
About civil aviation, it said, “Provision of Rs 4,500 crore for revival of 50 unserved and underserved airports/air strips has been taken up with budgetary support of government to be completed by December 2018.”
On shipping, the Survey said, “In 2017-18, projects with an investment of around Rs 10,000 crore and capacity addition of about 80 MMTPA are targeted for award. Of these, 15 projects involving an investment of around Rs 3,159 crore and capacity addition of 18 MTPA have already been awarded.”
Listing Bharatmala and Sagarmala as important initiatives for highways and shipping sectors respectively, the Survey said under Sagarmala ports master plans have been finalised under which 131 port capacity expansion projects with project cost of Rs 85,346 crore have been identified for implementation over next 20 years.
The Survey said all-India installed power generation capacity has increased substantially over the years and reached 330860.6 MW as on November 30, 2017.
About logistics sector, the Survey highlighted that “the Indian logistics market is expected to reach about $215 billion in 2020, growing at a CAGR of 10.5%”.
For the telecom sector, it said under phase II of Bharat Net to connect 1.5 lakh gram panchayats with high speed broadband is likely to be completed by March 2019.