The ₹111 lakh-crore investment up to FY25 seems daunting in the backdrop of the pandemic as Central and State governments face financial constraints
The Central Government’s plan of a massive increase in investment with the target of ₹111 lakh-crore under the National Infrastructure Pipeline (NIP) between FY2020-25 is likely to see severe near-term headwinds due to the pandemic, according to ICRA.
While even prior to the Covid-19 outbreak, the NIP was already quite ambitious and challenging, it seemed achievable with a significant push for infrastructure. But the virus outbreak has now made it a daunting task to achieve the target.
The government’s priority will be to fight the pandemic and the disruption caused. With fiscal constraints the investment in infrastructure may get pushed back – particularly by the State governments. Investments from the private sector are also likely to be deferred or scaled down.
Shubham Jain, Senior Vice-President and Group-Head, Corporate Ratings, ICRA, in a statement said, “In the current environment, the infrastructure investment in FY2021 would fall short of the plan, and consequently to achieve the NIP target a significant step-up of investments will be required in the later part of the plan. Against the total infrastructure investment of ₹36 lakh-crore envisaged in the first two years of NIP (FY2020-21), the actual investment is likely to range between ₹24-27 lakh crore. Consequently, to achieve the targeted investments in the remaining four years, an average annual investment of over ₹21 lakh crore will be required.”
The total infrastructure investment in India, between FY2013 to FY2019, stood at ₹57 lakh-crore. Compared with this, the NIP has planned an investment of over ₹111 lakh-crore during FY2020 to FY2025 – which is higher by 109 per cent. About 39 per cent of the projects will be implemented by the Centre, 40 per cent by the State governments, and the balance 21 per cent by the private sector. The NIP envisions a significant scale-up of investments from FY2021 onwards with an investment of ₹21.5 lakh-crore in FY2021 compared to ₹10 lakh crore of investments made in FY2019.
Jain added: “To bridge the infrastructure financing deficit, leveraging the Central Road and Infrastructure Fund (CRIF), the National Investment and Infrastructure Fund (NIIF), and the Infrastructure Investment Trust (InvITs) could support to some extent. InvITs have shown the potential of channelising long-term capital (like pension and insurance fund) into the infrastructure sector.”
Thank you for being a loyal user of Portfolio.
Portfolio will be a paid section hereon.
Please Subscribe to get access to one of our early bird packs.
Or click on Free Trial to get 14 days free trial.
What You'll Get
-
Web + Mobile
Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.
-
Exclusive Portfolio and Investment Advice, Banking, Lifestyle and Specials
Get diverse set of perspectives from our trusted experts on Portfolio, Banking, Economy, Environment and others.
-
Ad free experience
Experience cleaner site with zero ads and faster load times.
-
Personalised dashboard
Customize your preference and get a personalized recommendation of stories based on your interest.
Published on
June 19, 2020
A letter from the Editor
Dear Readers,
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!
Support Quality Journalism