India needs a continued step-up in infrastructure investment over the next two decades to sustain a high rate of growth, said the Economic Survey of 2024-25.
The survey also highlighted that capital expenditure took a hit in the first quarter of the financial year 2024-25.
On average, the Union government spent Rs 66,000 crore per month between April and November of FY25 on capital expenditure. Last year, during the same period, its monthly expenditure stood at Rs 60,000 crore.
"Requirements are aplenty. Accelerating our efforts to build integrated multi-modal transport, coupled with the modernisation of existing physical assets, will improve efficiency and last-mile connectivity. 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," stated the Survey, released a day before the Union Budget.
The Survey pointed out that public sector efforts cannot fully meet these requirements, as there are binding budget constraints on different tiers of government. It said that private participation, which has remained limited so far, should accelerate in many critical infrastructure sectors in various ways - 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… Yet, the uptake of private enterprise is limited in many core sectors," said the Survey.
As per the issued data, constraints on new approvals and spending during the general elections, coupled with heavy monsoons in many regions, affected the progress of infrastructure spending in Q1FY25. However, between July and November 2024, the pace of capital expenditure picked up.
The addition to the rolling stock of railways, port handling capacity, and power and transformation capacity improved during FY25 so far on a year-on-year basis. However, the addition to the length of highways, roads, and railway lines has been modestly lower.
Data showed that only 5,853 kilometres of national highways were constructed between April and December of FY25, compared to 6,215 kilometres constructed in the same period last financial year. India has a total road network of 63.4 lakh kilometres, including the National Highway (NH) network of 146,195 kilometres. The NH network forms the arterial backbone of the road transport network, as it comprises only 2 per cent of the total road network yet carries about 40 per cent of the overall road freight traffic.
Similarly, only 2,031 kilometres of the railway network were commissioned between April and November of FY25, compared to 2,282 kilometres commissioned in the same period last year.
