India needs $1.4 trn infra spend by FY25

New Delhi: To prevent 'lack of infrastructure' becoming a 'binding constraint' on the growth of Indian economy that aspires to become a $5 trillion by 2024-25, the country needs to spend about $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 $5 trillion by 2024-25, India needs to spend about $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.