The Economic Survey 2024-25, tabled before the Parliament, has highlighted that the Centre needs to come up with a new way to increase private sector financing in the infrastructure sector, and also tap new avenues to mobilise resources, official document said on January 31.
"Quite clearly, public sector efforts cannot fully meet these requirements. There are binding budget constraints to the different tiers of government. Private participation should accelerate in many critical infrastructure sectors," the Economic Survey said.
The survey said that not only will the central government need to come up with policy interventions to boost private capital expenditure but will also need support from the state government.
"The strategy to step up private participation needs coordinated action of all stakeholders involved - governments at different tiers, financial market players, project
management experts and planners, and the private sector," the survey said
Infrastructure sectors include atomic energy, civil aviation, telecommunications, renewable energy, power, road, rural development, ports, housing & urban affairs and railways.
Track the latest updates and highlights of the Economic Survey 2025 right here.
The survey also highlighted that the government needs to come up with new measures and work with the private sector 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 that initiatives like pooled financing mechanisms for municipal projects, specialised municipal intermediaries, asset recycling programs, tax increment financing and land sales and development rights, have been successful in international markets.
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The Survey also called for the need for strategic and systematic deregulation to boost growth in India.
"With deregulation, India's Mittelstand can help the states weather economic shocks, enable India to realise its manufacturing aspirations, attract long-term investments, and encourage growth which would be sustainable and 'employment-sensitive'," the survey said.
The survey highlighted that India will need a continued step-up of infrastructure investment over next two decades to sustain a high rate of growth. The country has invested a total of Rs 53.9 lakh crore on infrastructure between fiscal years 2020-2024, the survey pointed out.
"The Union Government’s capital expenditure on key infrastructure sectors has grown at a rate of 38.8 per cent from FY20 to FY24," the survey said.
The Economic Survey stated that in 2024-25, the capital expenditure by infrastructure was affected during Q1FY25, largely due to the model code of conduct during the general elections and unusual patterns of the monsoon season.
However, the survey said that capital expenditure saw an uptick in July-November 2024 and is expected 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 survey said, adding that the progress of capex seen in 2024-25 compares favorably to the last financial year after a general election 2019-20.
The Economic Survey also said there is a need to improve data capture and reporting mechanisms for investments in infrastructure across instruments and sectors as well as its composition across different projects on a granular level.
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