National Infrastructure Pipeline extends to cover 9,335 projects

The Ministry of Finance (MoF) told the media that the National Infrastructure Pipeline (NIP) has been expanded to 9,335 projects with overall envisaged investments of nearly Rs 108 trillion between financial year (FY) 2020 and FY2025. Earlier, the project had launched with 6,835 projects.

Tamil Nadu, with an estimated capital outlay of Rs 8.44 trillion, has the highest number of projects, followed by Andhra Pradesh (Rs 8.04 trillion), Maharashtra (Rs 7.69 trillion), Uttar Pradesh (Rs 5.26 trillion), Karnataka (Rs 3.96 trillion), and West Bengal (Rs 3.96 trillion) (Rs 3.65 trillion).

Only four infrastructure sectors create 71% of the projected infrastructure investments under the NIP: roads (23%), energy (21%), water and sanitation (15%) and railways (12%).

Pankaj Chaudhary, Minister of state for finance, told the media that 18-20% would be financed via the budget of the Central Government and 24-26% through the state’s budget.

The remaining funds are likely to come from different places, including bond markets, banks, Non-Banking Financial Companies (NBFCs), private developers, and multilateral agencies.

Chaudhary told the media the government plans to develop rural infrastructure under the NIP to provide basic facilities to enhance the quality of life.

The NIP also includes agro-based industries that support poverty alleviation, employment in rural areas, and better access to markets.

In April 2020, a work team led by then-economic affairs secretary Atanu Chakraborty submitted the final report of NIP to Finance Minister Nirmala Sitharaman.

The study suggested a series of reforms, including developing corporate bond markets (including those of municipal bonds), establishing development finance institutions for the infrastructure sector, and speeding up the monetisation of infrastructure assets and land.

Increased infrastructure investment is essential to ensure that India recovers as quickly as possible from the Covid-19 crisis.

The centre has set a budget with 36% increase in capital spending from the revised FY22 estimate to a record Rs 7.5 lakh crore for FY23 (excluding capital injection into Air India), specifically focusing on building infrastructure. Its capital expenditure (capx) in the coming fiscal year would be more than double the pre-pandemic level (FY20).

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