India needs step up investment in infrastructure for higher growth; Private Sector must chip in in critical sectors

ANI January 31, 2025 97 views

The latest Economic Survey highlights India's urgent need to ramp up infrastructure investment over the next two decades. It emphasizes the critical role of private sector participation in driving economic growth across key infrastructure sectors. The government is pushing for innovative public-private partnership models and sustainable development practices to overcome current investment challenges. These efforts aim to create a more robust, efficient, and environmentally conscious infrastructure landscape that can support India's long-term economic aspirations.

"A well-coordinated effort involving all stakeholders is essential for increasing private participation" - Economic Survey 2024
New Delhi, January 31: The Economic Survey presented on Friday emphasised that India needs a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth.

Key Points

1

Boost private sector involvement in critical infrastructure development

2

Implement innovative PPP models for project execution

3

Focus on sustainable and eco-friendly infrastructure practices

4

Develop integrated multi-modal transport networks

It called for a significant increase in private sector investment across critical infrastructure sectors in line with government capex.

Eco survey highlighted the importance of private participation in areas such as programme and project planning, financing, construction, maintenance, monetization, and impact assessment.

The Survey stressed that while financial market regulators have introduced reforms to stimulate private participation, the current level of private investment does not fully meet the growing infrastructure needs of the country.

The government emphasized that a well-coordinated effort involving all stakeholders -- including federal, state, and local governments, financial market players, project management experts, and the private sector -- is essential for increasing private participation.

A key challenge highlighted in the report is the need for better capacity in areas such as project conceptualization, sector-specific innovative strategies for execution, risk and revenue sharing, contract management, and conflict resolution.

These areas must be strengthened to ensure smoother execution of infrastructure projects and enhance the effectiveness of PPP models.

Despite the government's various initiatives to facilitate private involvement, including the introduction of diverse public-private partnership (PPP) models such as build-operate-transfer (BOT), design-build-finance-operate-transfer (DBFOT), and hybrid annuity models, the uptake of private investment remains limited in several core sectors.

The government has also introduced key mechanisms like the National Infrastructure Pipeline, National Monetisation Pipeline, and PM-Gati Shakti to ease bottlenecks and encourage private enterprise.

The survey also placed significant emphasis on sustainable infrastructure practices. The government is focusing on the use of eco-friendly materials and processes in key areas such as highway development, waterway projects, power capacity expansion, and waste management.

The global shift toward sustainability, coupled with India's domestic commitment to Net Zero, has prompted heightened attention to building infrastructure in a way that minimizes environmental impact.

India's long-term infrastructure goals were laid out, with a clear call for continued investment over the next two decades to sustain high growth.

The government stressed the importance of accelerating efforts in building integrated multi-modal transport networks, modernizing existing physical assets, and enhancing disaster-resilient urbanization. Additionally, the survey highlighted the need for better rural infrastructure, heritage preservation, and the expansion of renewable energy capacities.

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