How NIP is resetting priorities for economic revival
ECONOMY & POLICY

How NIP is resetting priorities for economic revival

As infrastructure ministries lay out ambitious plans to go the “InfraNirbharta”, or infrastructure-dependence, route, a commendable method to get there is the National Infrastructure Pipeline. Pratap Padode explains how, but ends on a cautionary note.

_______

All through 2020, we urged the government to relook at their priorities and prioritise infrastructure. We have written open letters to the Finance Minister, sent letters to the Prime Minister, and urged in several articles round the year. On 1 February 2021, the Union Budget delivered sweet music to my ears. From Atmanirbhar (Self-reliant) we morphed into InfraNirbhar (infrastructure-dependent). The National Infrastructure Pipeline (NIP), which was seeming to turn into a pipe dream, catapulted back into the reckoning.

Construction World made inroads into the Ministry of Finance, Ministry of Road Transport & Highways (MoRTH), and Ministry of Housing & Urban Affairs to gather first-hand intelligence into the seriousness and the plan of execution.

While Union Minister Nitin Gadkari is already setting his sights on achieving the 40 km per day target, Minister of State for Housing & Urban Affairs, Hardeep Singh Puri is laying the ground for 1,700 km of metro rail in 25 cities by 2025. The road to great infrastructure is fraught with challenges. But Dr TV Somanathan, Secretary (Expenditure) allayed the scepticism by acknowledging that although the plan depended on the success of the asset monetisation programme and disinvestment, they had prioritised and provided for additional funding towards meeting the enhanced infrastructure expenditure required as per the NIP.

The setting up of a Development Fund for infrastructure funding would provide long term finance and would currently leverage on the low rates of interest trending due to a sea of liquidity in the global markets. Somanathan admitted that the National Infrastructure Investment Fund could not accomplish in entirety what they had hoped and hence the need to set up this alternate institution. Deepening the bond market, which has been a perennial demand, has also been put on priority.

The asset monetisation programme for MoRTH is already underway, with Infrastructure Investment Trusts (InvITs) set to raise funds on existing toll yielding road assets. MoRTH Minister Nitin Gadkari, not content with only scaling up his execution targets urged the industry━including RS Mopalwar, the Managing Director of Maharashtra State Road Development Corporation (MSRDC), which is currently executing the 701 km Samruddhi Mahamarg between Mumbai and Nagpur━to create greenery, to consider interventions like steel fibre as building material, crash barriers made of bamboo, and such other material in improving sustainability.

The plans on metro rail are well-funded and the need is to improve the number of passengers to improve viability. Metro Neo Lite, a lighter version of the metro rail which also makes a smaller hole in the pocket may be an answer to some of the smaller cities, which do not have enough numbers to support a larger investment. The Andhra Pradesh Metro Rail CEO Surjit Madan is exploring this option, and so are the Nashik Metro Rail authorities.

India seems to be on its way to reform in order to transform. There are tedious challenges in the ‘ease of doing business’ area within infrastructure and we literally have miles to go. Legacy issues will continue to keep bogging us down but if funding and sustainability is on track these will evolve.

Meanwhile, a sharp rebound in construction and manufacturing helped India's GDP record a marginal 0.4% growth in the October-December quarter that also coincided with India’s festival season, according to data released by the National Statistics Office (NSO) Friday. For the full year, the NSO has forecast a steeper contraction of 8% than the 7.7% forecast earlier. For the quarter ending December, construction recorded a growth of 6.2% as against a contraction of 7.2% seen in the preceding quarter. The financial, real estate and professional services was another sector that saw a sharp revival—growing at 6.6% in the quarter as against a contraction of 9.5% in the previous quarter.

We are out of the recession but not out of the woods yet.

Author: Pratap Padode is the Editor-in-Chief of Construction World and President of FIRST Construction Council.

Image source: MoSPI

As infrastructure ministries lay out ambitious plans to go the “InfraNirbharta”, or infrastructure-dependence, route, a commendable method to get there is the National Infrastructure Pipeline. Pratap Padode explains how, but ends on a cautionary note. _______ All through 2020, we urged the government to relook at their priorities and prioritise infrastructure. We have written open letters to the Finance Minister, sent letters to the Prime Minister, and urged in several articles round the year. On 1 February 2021, the Union Budget delivered sweet music to my ears. From Atmanirbhar (Self-reliant) we morphed into InfraNirbhar (infrastructure-dependent). The National Infrastructure Pipeline (NIP), which was seeming to turn into a pipe dream, catapulted back into the reckoning. Construction World made inroads into the Ministry of Finance, Ministry of Road Transport & Highways (MoRTH), and Ministry of Housing & Urban Affairs to gather first-hand intelligence into the seriousness and the plan of execution. While Union Minister Nitin Gadkari is already setting his sights on achieving the 40 km per day target, Minister of State for Housing & Urban Affairs, Hardeep Singh Puri is laying the ground for 1,700 km of metro rail in 25 cities by 2025. The road to great infrastructure is fraught with challenges. But Dr TV Somanathan, Secretary (Expenditure) allayed the scepticism by acknowledging that although the plan depended on the success of the asset monetisation programme and disinvestment, they had prioritised and provided for additional funding towards meeting the enhanced infrastructure expenditure required as per the NIP. The setting up of a Development Fund for infrastructure funding would provide long term finance and would currently leverage on the low rates of interest trending due to a sea of liquidity in the global markets. Somanathan admitted that the National Infrastructure Investment Fund could not accomplish in entirety what they had hoped and hence the need to set up this alternate institution. Deepening the bond market, which has been a perennial demand, has also been put on priority. The asset monetisation programme for MoRTH is already underway, with Infrastructure Investment Trusts (InvITs) set to raise funds on existing toll yielding road assets. MoRTH Minister Nitin Gadkari, not content with only scaling up his execution targets urged the industry━including RS Mopalwar, the Managing Director of Maharashtra State Road Development Corporation (MSRDC), which is currently executing the 701 km Samruddhi Mahamarg between Mumbai and Nagpur━to create greenery, to consider interventions like steel fibre as building material, crash barriers made of bamboo, and such other material in improving sustainability. The plans on metro rail are well-funded and the need is to improve the number of passengers to improve viability. Metro Neo Lite, a lighter version of the metro rail which also makes a smaller hole in the pocket may be an answer to some of the smaller cities, which do not have enough numbers to support a larger investment. The Andhra Pradesh Metro Rail CEO Surjit Madan is exploring this option, and so are the Nashik Metro Rail authorities. India seems to be on its way to reform in order to transform. There are tedious challenges in the ‘ease of doing business’ area within infrastructure and we literally have miles to go. Legacy issues will continue to keep bogging us down but if funding and sustainability is on track these will evolve. Meanwhile, a sharp rebound in construction and manufacturing helped India's GDP record a marginal 0.4% growth in the October-December quarter that also coincided with India’s festival season, according to data released by the National Statistics Office (NSO) Friday. For the full year, the NSO has forecast a steeper contraction of 8% than the 7.7% forecast earlier. For the quarter ending December, construction recorded a growth of 6.2% as against a contraction of 7.2% seen in the preceding quarter. The financial, real estate and professional services was another sector that saw a sharp revival—growing at 6.6% in the quarter as against a contraction of 9.5% in the previous quarter. We are out of the recession but not out of the woods yet. Author: Pratap Padode is the Editor-in-Chief of Construction World and President of FIRST Construction Council.Image source: MoSPI

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