Infrastructure Investment – Building a New India

India is currently ranked amongst the fastest growing economies of the world and with its young entrepreneurial talent, is poised to emerge as a leading Asian economy. Development - this catch word has been used time and again for defining the current condition of human society in this part of the globe. Right from 1947, after securing the political independence, successive governments have launched new "developmental" schemes. Yet, despite many efforts, much remains to be done even today. Development is basically an umbrella term - meaning development if all aspects of a nation- from educational to social and from technological to economic. However, the basis of all these endeavors is infrastructure development.

Infrastructure is the basic requirement for all the other processes to follow suit. Today, infrastructure not only means roads and buildings, but includes latest trends in construction and housing facilities as well. However, is enough being done for ensuring that the requirement of investment is actually met? Critical infrastructure segments, including roads, railways and ports, have witnessed a shortfall in actual investments. The gap in terms of physical achievement of infrastructure projects is more perceptible than that in investment. Moreover, physical achievements have not matched the aggressive investment targets set in previous Five Year Plans.

Projects are delayed due to multiple factors, leading to time and cost overruns. Only a quarter of the total number of infrastructure projects has been commissioned on their scheduled dates in India. Yet, situation in India is changing. From world class hospitals, eight-lane highways, engineering marvels, modern real estate development to basic facilities for the population, infrastructure development in India is a massive leap forward. Consider the following points*:-

1. Value of total roads and bridges infrastructure in India is estimated to have expanded at a CAGR of 13.6 per cent over FY09-17 to US$ 19.2 billion
2. In Union Budget 2018-19, Rs 71,000 crore (US$ 10.97 billion) was allocated for national highways while Rs 19,000 crore (US$ 2.94 billion) was allocated to Pradhan Mantri Gram Sadak Yojana (PMGSY) for development of roads in rural and backward areas of the country.
3. Highway network in the country is expected to cover 50,0000 km by 2019. National highway construction in India increased by 20 per cent year-on-year in 2017-18.
4. In December 2017, the National Highway Authority of India (NHAI) created the National Highways Investment Promotion Cell (NHIPC) to attract foreign and domestic investments towards highway projects in India.

These are the latest developments and can offer an insight into the huge potential for infrastructure development that remains to be tapped in India.

This is where infrastructure development can be seen as an investment for the future. However, merely expecting government funding for such a huge task cannot be a solution. As per leading experts, private funding for developmental projects is a requirement and in fact, a close collaboration between government and private key players is very important for this. PPPs (Public-Private-Partnerships) are urgently required on a higher scale to speed things up even as the global economic conditions remain favorable for developmental projects and investments in India.

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*https://www.ibef.org/industry/infrastructure-sector-india.aspx

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