India needs to invest around $1.4 trillion by 2024-25 in order to achieve a gross domestic product (GDP) of $5 trillion by 2024-25, even as scaling up investment in the sector remains a challenge, the Economic Survey 2022 said.
India invested a total of $1.1 trillion on infrastructure fiscal years 2008-17.
“The challenge is to step up infrastructure investment substantially. Keeping this objective in view, National Infrastructure Pipeline (NIP) was launched with projected infrastructure investment of around Rs 111 lakh crore (US$ 1.5 trillions) during FY 2020-2025 to provide world-class infrastructure across the country, and improve the quality of life for all citizens,” the survey said.
NIP was launched with 6,835 projects, which has expanded to over 9,000 projects covering 34 infrastructure sub-sectors. Between financial years 2020 to 2025, sectors such as energy (24 percent), roads (19 percent), urban (16 percent), and railways (13 percent) amount to around 70 percent of the projected capital expenditure in infrastructure in India.
“It (NIP) also envisages to improve project preparation and attract investment, both domestic and foreign in infrastructure,” the survey said.
The Economic Survey stated that in the nine-month period ended December in 2021-22, the capital expenditure has grown by 13.5 percent year-on-year with focus in infrastructure-intensive sectors like roads and highways, railways, and housing and urban affairs.
“This increase is particularly substantial given the high year-on-year growth in capital expenditure registered during the corresponding period of the previous year as well,” the survey said.
The Economic Survey said that the last two years have been difficult for the world economy on account of the COVID-19 pandemic. The repeated waves of infection, supply-chain disruptions and, more recently, inflation have created particularly challenging times for policy-making. The government responded to these challenges with a “bouquet of safety-nets” to cushion the impact on vulnerable sections of society and the business sector, as an immediate action. It next pushed through a significant increase in capital expenditure on infrastructure to build back medium-term demand as well as aggressively implemented supply-side measures to prepare the economy for a sustained long-term expansion.
“The higher capital expenditure with a focus on infrastructure spending in 2021-22 budget estimate will have a multiplier effect on the ongoing economic recovery,” the Economic Survey said.
