Niti Aayog to lend support in development of 10 big infra projects
Mar 21 2017 , New Delhi
States have asked Niti Aayog to shortlist 10 big infrastructure projects for implementation through the public-private partnership (PPP) route. Project proposals will come from states, sources said.
As per the World Economic Forum global competitiveness report 2014, India ranks 84 out of 144 countries in terms of infrastructure quality. There is urgency within the government to expedite infrastructure building India seeks to boost global competitiveness.
But meeting infrastructure deficit would need huge investment (at least $1.5 trillion over 10 years, as per one estimate), which can’t be mobilised from domestic sources alone.
Domestic banks have turned cautious after burning their fingers in infrastructure financing during the UPA regime. The infrastructure sector accounted for 32 per cent of stressed loans in the banking sector at the end of March 2016.
The domestic bond market, which lacks liquidity, is not in a position to meet the funding requirement of the infrastructure either.
India had envisaged $1 trillion investment during the 12th Plan ( 2012-2017). The private sector was expected to contribute 48 per cent of it, up from 37 per cent in the 11th Plan. But an appraisal of first two years’ experience showed that actual investment during the 12th Plan could fall short of the goal by 30 per cent. Shortfall in private investment is projected at 43 per cent.
Industry experts have hailed the envisaged involvement of Niti Aayog in infrastructure development.
“Aayog’s involvement is welcome. It can get states to prepare better PPPs, which leverage limited public sector capital, to unlock private sector efficiency,” said Manish Agarwal, who leads infrastructure advisory at PwC, a consulting firm.
A senior government official said the proposal to shortlist 10 big projects on priority basis was discussed during a recent meeting of Aayog functionaries and representatives from various states. The official said the list of 10 big infrastructure projects would be prepared after taking into consideration the details of such big projects that would be provided by the states in the coming weeks.