India needs to spend USD 1.4 trillion on infrastructure to become a USD 5 tn economy by 2025: Economic Survey
To prevent 'lack of infrastructure' becoming a 'binding constraint' on the growth of Indian economy that aspires to become a USD 5 trillion by 2024-25, the country needs to spend about USD 1.4 trillion on infrastructure, the Economic Survey said on Friday.
To prevent 'lack of infrastructure' becoming a 'binding constraint' on the growth of Indian economy that aspires to become a USD 5 trillion by 2024-25, the country needs to spend about USD 1.4 trillion on infrastructure, the Economic Survey said on Friday. Investment in infrastructure is necessary for the economy, as power shortages, inadequate transport and poor connectivity affect overall growth performance, the Economic Survey for 2019-20 tabled in Parliament by Union Finance and Corporate Affairs Minister Nirmala Sitharaman stated.
"To achieve the GDP of USD 5 trillion by 2024-25, India needs to spend about USD 1.4 trillion on infrastructure. The challenge is to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy," the Survey said.
For a smooth and fast development, India needs adequate and timely investment in quality infrastructure, it said, adding the report of the Task Force on National Infrastructure Pipeline has projected total infrastructure investment of Rs 102 lakh crore during the period FY2020 to 2025 in India.
In a fast moving world to maintain growth momentum, India has to develop its industry and infrastructure, the Survey said, adding that as an emerging economy, the scope for next-generation infrastructure is enormous.
"To experience the potential of the perfect blend of Industry 4.0 and next generation infrastructure, it is necessary to clear the decks which are obstructing the way forward ... next generation infrastructure brings physical infrastructure and technology like internet of things, automation together to maximize the efficiency of physical infrastructure," the Survey said.
Power shortages lead to dependence on expensive captive power, which in turn impels high costs and lack of competitiveness for the economy, it noted.
Likewise inadequate transport infrastructure leads to bottlenecks both in the supply of raw materials as well as movement of finished goods to the marketplace, it said, adding "the price that farmers get for their produce is depressed if there is no connectivity through good quality rural roads, which in turn keeps rural incomes depressed negating the fruits of high overall growth performance.
Terming road transport as the dominant mode of transportation, the Survey said total investment in the road and highways sector has gone up more than three times in five years from 2014-15 to 2018-19.
The Survey marked that during 2018-19, Indian Railways carried 120 crore tonnes of freight and 840 crore passengers, making it the world's largest passenger carrier and fourth largest freight carrier.
Taking a comprehensive view of civil aviation, the Survey observed that India has 136 commercially managed airports by Airport Authority of India and six under public-private partnerships for operation, maintenance and development of airports.
A total of 43 airports have been operationalised since the scheme for operationalizing unserved airports was taken up.
To ease the strain on existing airport capacities, 100 more airports are to be made operational by FY2023-24, the Survey said adding to continue with the high growth trajectory the government has been providing a congenial environment so that Indian carriers double their fleet from about 680 aircraft at the close of 2019 to 1,200 by FY 2023-24.
About shipping sector, the Economic Survey stated that around 95 per cent of India's trade by volume and 68 per cent in terms of value is transported by sea.
As on September 30, 2019, India had a fleet strength of 1,419 ships.
The major ports in the country have an installed capacity of 1,514.09 million tonnes per annum (MTPA) as on March 2019 and handled traffic of 699.09 MT during 2018-19.
The Survey said the Ministry of Shipping is striving to improve operational efficiencies through mechanisation, digitisation and process simplification. The average turnaround time in 2018 improved to 59.51 hours as against 64.43 hours in 2017-18.
The Survey said universal electrification progress has been made in generation and transmission of electricity. The installed capacity has increased from 3,56,100 MW in March 2019, to 3,64,960 MW as on October 31 2019.
The Survey underlined that access to electricity is necessary for making growth inclusive and for promoting ease of living.
Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA) was launched on September 25, 2017 with an outlay of Rs 16,320 crore to achieve universal household electrification by providing last mile connectivity by March 31, 2019.
The Survey observed that except for few households in Left Wing Extremism affected Bastar Region of Chhattisgarh, all the states have reported electrification of all households on the SAUBHAGYA portal.
On mining sector it said there has been a notable turnaround in mineral production because of policy reforms and production of major minerals during the year 2018-19 has recorded a growth of 25 per cent when compared to last year in terms of value.
While giving an overview of the construction sector, the Survey said it accounts for 8.24 per cent of GDP which includes housing and employs about 12 per cent of the work force.
The Pradhan Mantri Awaas Yojana–Urban (PMAY-U) launched in June 2015, the Survey said is one of the largest housing schemes of the world covering entire urban India and is being implemented through four verticals.
The scheme is moving towards achieving the vision of "pucca" house to every household by 2020, it said adding 32 lakh houses have been completed and delivered.
The Survey noted that since the launch of the Smart City Mission in 100 cities 5,151 projects worth more than Rs 2 lakh crore are at various stages of implementation and added a total of 1,290 projects worth Rs 22,569 crore have been completed and are operational.