Year In Review: Key Highlights Of Infrastructure Sector In 2022
The Infrastructure sector in India ranked at tenth position globally concerning the overall quality of the infrastructure environment in the country, as per data availed by India Brand Equity Foundation (IBEF).
By 2025, India is aiming to become a USD five trillion economy due to which infrastructure development is the key factor for overall growth.
The central government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as ‘Make in India’ and the production-linked incentives (PLI) scheme to augment the development of the infrastructure sector.
Notably, over 80 per cent of the country's infrastructure spending has gone toward funding for transportation, electricity, and water and irrigation systems.
To strengthen the bilateral relations, India in November 2021 has established a new quadrilateral economic forum with the USA, Israel and the UAE to boost infrastructure development projects.
The initiative ‘Infrastructure for Resilient Island States’ has been initiated to enhance the infrastructure development projects for the betterment of other vulnerable countries in the world.
Also, major investments in infrastructure have been done, for example, the Reliance Digital Fibre Infrastructure Trust Investment of USD 1 billion has provided momentum to overall private equity or venture capital investments in India
Furthermore, Prime Minister Narendra Modi announced Rs 100 lakh crore master plan in October 2021 to build multi-modal connectivity with the target of achieving developed infrastructure at lower logistics cost and for the improvement of the economy.
Here are some of the recent government initiatives that made headlines in 2022-
1. To enhance the infrastructure sector of the country, PM Modi's government allocated Rs 10 lakh crore (USD 130.57 billion).
These include the allocated budget of Rs 134,015 crore (USD 17.24 billion) to the National Highways Authority of India (NHAI), an outlay of Rs 60,000 crore (USD 7.72 billion) for the Ministry of Road Transport and Highways, Rs 76,549 crore (USD 9.85 billion) to the Ministry of Housing and Urban Affairs among others.
2. A rail-cum-road bridge across the Brahmaputra river was approved by the government at the cost of Rs 996.75 crore (USD 122.27 million) under the NHAI and Ministry of Railways. In August, the minister of Road Transport and Highways, Nitin Gadkari laid the foundation stone of six NH projects worth Rs 2,300 crore (USD 287.89 million) in Indore, Madhya Pradesh.
3. Between April 2000 to June 2022, the FDI in construction development (townships, housing, built-up infrastructure and construction development projects) and construction (infrastructure) activity sectors stood at USD 26.22 billion and USD 28.64 billion, respectively.
4. Until September 2022, the combined index of eight core industries including coal, refinery products, fertilisers, steel, electricity and cement stood at Rs 142.8 crore. The country's infrastructure output growth slowed majorly to 0.1 per cent year-on-year (YoY) in October 2022 from a downwardly revised 7.8 per cent in the previous month.
5. In September this year, the Modi government launched Mega Investment Textiles Parks (MITRA) scheme to establish world-class infrastructure in the textile sector and establish seven textile parks over the next three years.
6. The government further expanded the ‘National Infrastructure Pipeline (NIP)’ to 9,335 projects. Around 217 projects worth Rs 1.10 lakh crore (USD 15.09 billion) were completed as of 2020.
7. In the fiscal year 2022, the government expanded initiatives such as the National Infrastructure Pipeline, National Monetisation Pipeline, Bharatmala Pariyojana, changes in the Hybrid Annuity Model (HAM) and fast allotment of asset monetisation to boost the road construction activities in the country.
8. In rural areas, under the Ministry of New and Renewable Energy to encourage rooftop solar (RTS) throughout the country, the government is undertaking Rooftop Solar Programme Phase II intending to install an RTS capacity of 4,000 MW in the residential sector by 2022 with a provision of subsidy.
Meanwhile, India will need to invest USD 840 billion over the next 15 years— or an average of USD 55 billion per annum— into urban infrastructure to meet the needs of its fast-growing urban population, a new World Bank report estimated.
The report named “Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action” underlines the urgent need to leverage more private and commercial investments to meet emerging financial gaps.
