NATIONAL INFRASTRUCTURE PIPELINE-NIP

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 NATIONAL INFRASTRUCTURE PIPELINE-NIP

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• NIP – A big dream envisioned, to turn around the Indian economy
• National Infrastructure Pipeline: The Centre launched a National Infrastructure Pipeline (NIP) in 2020, unveiling projects worth Rs 102 trillion. The aim is to boost economic growth and help the economy reaches the $5-trillion target by 2024-25.
• Details: 

1. The NIP has identified projects across 23 sectors and 18 states and Union Territories. These projects will be funded over the next five years by the central and state governments as well as the private sector. 
2. Finance Minister Nirmala Sitharaman shared that of the proposed projects, 39% each would be implemented by the Centre and states, and the rest 22% by private players. 
3. The government was expecting the private sector’s share to go up to 30% by 2024-25, and some additional projects worth Rs 3 trillion to be identified, taking the total commitment to Rs 105 trillion.

• The task force: To achieve this objective, a task force was constituted to draw up the pipeline for each of the years from Financial year (FY20) to FY25. The task force suggested new sectoral policies, and need for state governments’ cooperation.

1. The report identifies five specific reasons why Indian infrastructure needs an overhaul. These reasons include urbanization, growing working-age population, urban contribution to employment, shift to services-based economy and climate change and disaster resilience. 
2. Secondly, the NIP takes a broad view of what’s included in infrastructure development. Social infrastructure areas including higher education, school education, health and family welfare, sports and tourism are specifically called out. 
3. Thirdly, for each sector, a general vision of the year 2025 has been painted. This vision includes not just the end state of the NIP, but also a few pointers on how the governance and the administration of the sector looks like.

• Impact of the move: 

1. The step is expected to enhance economic activity, generate employment and boost demand. 
2. Encouraging more private sector investment in the infrastructure space can create additional fiscal space for the government.
3. The NIP to give top priority to energy, roads, urban development and railways in 5 years. The NIP will mobilize Infrastructure projects, which will create jobs, improve ease of living and provide equitable access to infrastructure for all. 

• The numbers:

1. Between FY20 and FY25, sectors such as energy (24%), roads (19%), urban (16%) and railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.
2. For 2019-20, annual investment of Rs.13.6 trillion has been estimated. According to projections, Rs.19.5 trillion will be spent in 2020-21, Rs.19 trillion in 2021-22, Rs,3.8 trillion in 2022-23, Rs.12.8 trillion in 2023-24 and Rs.11.1 tr in 2024-25. The figures exclude those for the power sector and data from some states. 
3. Out of the total expected capital expenditure of Rs.102 trillion, projects worth Rs.42.7 trillion (42%) are under implementation, which includes expressways and the national gas grid.
4. Projects worth Rs.32.7 trillion (32%) are in the conceptualization stage and the rest are under development, which includes urban, roads and renewable energy.
5. Finally, in 2021, a new DFI called NaBFID was set up to ensure smoother funding of long-term projects.

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