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National Infrastructure Pipeline Dashboard (14 August 2020)

National Infrastructure Pipeline Dashboard (14 August 2020)

Why in News:

Monitoring of all infrastructure projects under the ?111-trillion National Infrastructure Pipeline (NIP) will be allowed on a digital platform to ensure access to updated project information for investments across various sectors, the finance ministry said on Monday.

Context:

The projects will be mapped and evaluated by the departments concerned and the finance ministry to monitor the implementation and actual progress, compared to the initial estimates of the NIP for each project. The move assumes significance as increased focus on infrastructure projects will help revive the economy following the covid-19 crisis.

Background:

It is estimated that India would need to spend $4.5 trillion on infrastructure by 2030 to sustain its growth rate.

In his Independence Day speech in 2019, Prime Minister Narendra Modi highlighted that Rs 100 lakh crore would be invested on infrastructure over the next five years.

Recently, the task force headed by Atanu Chakraborty (economic affairs secretary) on National Infrastructure Pipeline (NIP) submitted its final report to the Finance Minister.

The taskforce has forecasted an investment need of ?111 lakh crore over the next five years (2020-2025) to build infrastructure projects and drive economic growth.

The National Infrastructure Pipeline is an effort to augment India's infrastructure through an identified investment of INR 111 Lakh crores between FY 2020-25.

Summary of the Debate

Benefits of the NIP:

  • The private sector would like to know what specific project is coming up.
  • It will create employment opportunity and will improve standards of living.
  • It will increase government revenue and will enhance economic activity.
  • Increases investor confidence.
  • It also includes greenfield and brownfield projects.
  • It provides an equitable access to infrastructure for all.
  • It will attract both domestic as well as foreign investments into infrastructure,

                            National Infrastructure Pipeline (NIP) - INSIGHTSIAS

Challenges:

  • Raising of resources.
  • Delay in completion of projects, for example: making a bridge in China takes 6 months, but in India it takes 6 years. 
  • Approval takes long time because of Land acquisition, Litigation, Environment clearance, Contracting issues, etc.
  • Design of the project is crucial part but in no country of the world design is neglected as much as in India.
  • Foreign funds and the companies feel that, in India there is lack of coordination and approval gets time. So, totally in new project from Greenfield their interest is not so much there unless they find a strong partner.

Way Forward:

  • Public sectors have been working in many areas and wanting to take up many of those projects which are they not taking now, so they can now advertise and give it to private sector to take them up.
  • Public sector has large number of projects in their pipeline but they are running short of money. So, they should have an advisor consultant.
  • Now the corporate bond and long term financing is required for projects, long term financing means the insurance companies, the provident fund should come forward.
  • Private sector and foreign companies need to play very pro-active role as partners with the public sector and the government.
  • The detailed project report, the designing part of it and all that need to be done on collaboration basis.
  • There is need to differentiate between design of the project and the bidding of the project, once the successful bidder is there they will go and construct.
  • Primary construction should be done using Indian rupees and once the asset is completed, it should be offered completely or in partnership to International dollars.

Important points made by the Guests

Shailesh Pathak, Co-Chair, FICCI Committee on Transport Infrastructure

  • Despite everyone talking about infrastructure being such a crucial thing for India, where is the clarity that what is going to happen in the next 12 months.
  • The NIP is a 5 year plan for infrastructure projects in India and it has been not done by the Niti Aayog, it is done by the Finance Ministry.
  • The project has total amount of Rs 111 trillion, out of which 14.5 trillion was supposed to be in last financial year and 21.5 trillion is in this financial year.
  • The 100 percent of the infrastructure in India is going to be built by the private sector contractors, some of it government of India will pay for, some of it government of states will pay for and about 22 percent the private sector will pay for. But 100 percent of the contracting community is interested in the blueprint of the project that is next 12 months of project.
  • The private sector is looking for converting ideas into cash flow and their ideas run on what is the projects coming up in the next 6 months or 12 months or 24 months.
  • So, from NIP, only headlines and less information will not solve information requirement of the private sector.
  • There are various stages in infrastructure; one is design stage; one is the finance stage; one is the bidding stage and one is the construction stage and finally the operation stage.
  • The design stage is not so good in India and then we run in the financing stage where finance comes from public sources or private sources. In the actual construction the approvals are so difficult.

 Sushil Chandra Tripathi, Former Joint Secretary, Economic Affairs, Ministry of Finance

  • Up to 1980s, India was ahead of China in most of the indicators like skill, infrastructure, etc., but what China has done in last 30 years is massive investment in Infrastructure and in development of skills of the people.
  • Apart from direct benefits, infrastructure development also has externalities social and economic.
  • There was already a Ministry of Program Implementation which was monitoring major infrastructure projects, so whether a new organisation is coming up is not so material. Whatever comes, the department which are concerned with that activity they will have to be on board, the state government will have to be on board and highest priority should be given to it.
  • We need to have techno-economic feasibility not just a project idea.
  • We need to have financial closure, contracting, quick supervision, inter-ministerial, centre state coordination, etc.

K. A. Badarinath, Senior Journalist

  • When the Economic Survey of last financial year was laid before the parliament, the National Infrastructure Pipeline was announced by the Finance Minister N. Sitaraman and they have proposed that Rs 102 lakh crore of infrastructure projects will be implemented in the next five years as part of the government's spending push in the infrastructure sector.
  • From there they were supposed to link the National Infrastructure Pipeline with the India Investment Grid, which actually monitors and manages investment across from private sector, public sector, government sector, states and centre.
  • Whatever investments are being made, the India Investment Grid is suppose to capture all the data.
  • The dashboard is supposed to be some kind of:
    • Real time availability of the projects for prospective investors.
    • It also shows the people of this country that how many projects are implemented.
    • If there is any approval stuck, then the reasons need to be highlighted.
  • As per the latest data, out of the Rs 111 lakh crore National Infrastructure Pipeline project, about 39 percent of them are being implemented either by the central government directly or central public sector company or autonomous body and equal amounts of project are being done by state and state agency.
  • About 22 percent of this project is done by private sector, it could be domestic private sector foreign investor, who have a stake in this project.
  • Earlier planning commission used to monitor a lot of projects, now after the planning commission was disbanded and Niti Ayog was brought in, one doesn’t know that how much Niti Ayog’s involvement is in this entire exercise.

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