NEW DELHI: Finance Minister Nirmala Sitharaman on Tuesday said the government has created a pipeline of infrastructure projects worth Rs 102 lakh crore to be implemented between 2020 and 2025, mostly in the energy, roads, housing and irrigation sectors. However, analysts said this was business as usual and recommended a larger spending portfolio to resuscitate the slowing economy.
The projects pipeline drawn up by a high-level committee on infrastructure will consist of 39 per cent projects each by the Centre and states and the balance 22 per cent by the private sector.
Some Rs 13.6 lakh crore would be spent in the financial year 2020, while this would surge to Rs 19.5 lakh crore in FY 2021 and 19 lakh crore in 2022. The next three years will see a tapering off with 13.8 lakh crore in FY2023, 12.8 lakh crore in FY 2024 and Rs 11.1 lakh crore in FY 2025. Sitharaman, who announced the pipeline here, said another Rs 3 lakh crore would soon be added to it and expected private investment in infrastructure to be increased with time.
“This really means that the Centre would be roughly spending Rs 40 lakh crore or the same amount that it has been spending on an average for some time on infrastructure, that is about Rs 8 lakh crore … it is not really that major an infrastructure push,” said Prof. Arun Kumar, Malcolm Adiseshiah Chair at the Institute of Social Sciences.
“We have been advocating a far larger infrastructure push to bring the Indian economy out of its slow growth mode and protect us from the vagaries of the global economy which too is slowing down at an alarming pace. We thought that when the Prime Minister announced a Rs 100 lakh crore spending target for 5 years (earlier this year) it meant the Centre would spend Rs 20 lakh crore on its own,” Kumar said.
The task force was set up to draw up plans after the Prime Minister announced that Rs 100 lakh crore would be spent on infrastructure over the next five years in his Independence Day speech.
Analysts, however, pointed out that the plans were still “mostly in the offing”, with 31 per cent in the conceptual stage, another 42 per cent at various stages of implementation and 19 per cent of them under development.
“The states are short of funds and it is doubtful they would be able to do what is being asked of them as the central devolution of 42 per cent of revenues is in practice falling short. In the 5-year plan periods we have seen that private sector infrastructure plans were notorious in not being fulfilled. Given the slowdown, their implementation cannot be expected to be way better,” said Prof Biswajit Dhar of JNU.
Of the spending thrust, conventional power will account for Rs 11.76 lakh crore and renewables for another Rs 9.3 lakh crore. Roads would account for another Rs 19.64 lakh crore, urban housing for Rs 16.29 lakh crore and railways for R 13.69 lakh crore. The rural sector will see irrigation spending at Rs 7.73 lakh crore and rural infrastructure getting some Rs 4.11 lakh crore.
Officials said these projects are on top of Rs 51 lakh crore spent by the Centre and the states during the last six years. “It is expected that projects of certain states, which are yet to communicate their pipelines, would be added to the pipeline in due course,” said an official.