Support both public, private projects: FM to infra ministries
The National Infrastructure Pipeline (NIP) will play a critical role in revitalising the economy that is recovering from the devastating impact of Covid-19 pandemic, and government departments must extend all support to both public and private sector projects alike, finance minister Nirmala Sitharaman told senior bureaucrats on Friday.
Addressing 22 secretaries of infrastructure ministries on budget action points for infrastructure, the finance minister said NIP is not just central government budgetary expenditure on Infrastructure, it also includes infra spending by states and private sector. “Therefore, ministries or departments should actively work on getting project funded through innovative structuring and financing, and provide all the help and support to private sector for enhanced infra spending,” a finance ministry statement quoting her said.
Sitharaman said ministries and departments need to work very hard in order to ensure achieving targets of the NIP. In her Budget speech on February 1, she said: “The NIP is a specific target which this government is committed to achieving over the coming years. It will require a major increase in funding both from the government and the financial sector. In this Budget, I propose to take concrete steps to do this, in three ways: Firstly, by creating the institutional structures [creation of a development finance institution]; secondly, by a big thrust on monetising assets, and thirdly by enhancing the share of capital expenditure in central and state budgets.”
The government had announced a ₹111-lakh crore National Infrastructure Pipeline (NIP) in December 2019, which is its one of the major growth engines.
The finance minister requested secretaries to ensure their “full and personal engagement” in NIP implementation, updation on NIP portal and expedite implementation of NIP projects as she would hold regular review meetings with them. The Friday meeting was the third review meeting on this matter as the government expects NIP to help the economy to recover fast from the devastating impact of Covid-19 pandemic.
Sitharaman reviewed the progress of NIP, which was launched with 6,835 projects. The project pipeline has now been expanded to nearly 7,600 projects and has witnessed accelerated spending on infrastructure projects in ministries specially in the second and third quarters of current financial year, the statement said.
“It has helped in targeting substantial increase in infrastructure expenditure in many ministries in FY21 over expenditure done in FY20. Around 216 projects worth ₹74,067 crore under GoI [Government of India] infrastructure ministries have been completed till Q3 FY21. Around 678 projects worth ₹6 lakh crore have progressed from the lower stage to the upper stage of project formulation and implementation till Q3 FY21,” it said.
The ministries and departments also need to explore public-private-partnership (PPP) mode for viable projects and use government funding for pushing infrastructure projects which can’t be done in PPP mode, it said quoting FM.