The importance of infrastructure development in stimulating sustainable economic growth can never be overstated. It is for this reason that the over Rs 100-trn National Infrastructure Pipeline (NIP) announced by the Centre a few months back is likely to play a key role in India’s economic standing in a post Covid world.
However, for the NIP to be implemented within envisaged timelines, mobilising adequate private financing is essential. Government finances are already constrained due to reduced tax collections and the economic fallout of the pandemic. In 2020-21, the original budgetary outlay on infrastructure was just above Rs 4 trn, which was subsequently increased by another Rs 37,000 crore. Even if one were to assume an increase in budgetary outlays in subsequent years, it is quite likely that as much as 60-70% of the total NIP outlay of Rs 100 trn may require private financing.