India Infrastructure Report (IIR)

The India Infrastructure Report 2023 on Urban Planning and Development was released in December 2023

• IIR – It is an annual publication initiated by the IDFC Foundation in 2001.
• Published by – IDFC Foundation, Infrastructure Development Corporation (Karnataka) Ltd. (iDeCK) and the National Institute of Urban Affairs (NIUA).

IDFC Foundation is a not-for-profit institution, working on philanthropic initiatives in social infrastructure.

IDeCK, established in 2000 as a joint venture of the Government of Karnataka, IDFC Foundation and HDFC.

• Objectives – To identify and analyze holistic aspects related to infrastructure development and to provide resource for formulating urban policy.

India Infrastructure Report 2023

• It contains 25 chapters in policy ecosystem on the current state of urban development.
• Urban governance – Urban transportation planning and urban redevelopment.
• Digital technology in urban transformation – Smart cities and performance-based ranking of cities.
• Financial aspects – Financial sustainability of urban local bodies, public-private partnership (PPP) and efficacy of municipal bonds.
• It also highlights on housing and migration and public service delivery.
• Findings – India has led in PPPs, especially in roads, ports, airports and energy, while few PPPs have happened in the urban sector.

National Infrastructure Pipeline

The National Infrastructure Pipeline is a collection of projects and programs totaling INR 102 lakh crore in infrastructure development over the next five years. It follows the government's goal of making India a $5 trillion economy by 2024-25. NIP covers economic and social infrastructure projects in sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) that account for almost 70% of India's expected infrastructure capital spending.

Need of National Infrastructure Pipeline (NIP):

1. $5 trillion goal: To achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs. 100 lakh crore) over these years on infrastructure. This challenge is to be tackled by National Infrastructure Pipeline so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy.
2. Inclusive growth: Availability of quality infrastructure is a prerequisite to achieve broad-based and inclusive growth on a sustainable basis.
3. Poor infrastructure: India’s growth potential has not been achieved mainly due to poor infrastructure in various sectors. National Infrastructure Pipeline would help in Improving the infrastructure and realising the growth potential.
4. Investment: India can’t achieve high growth without investment. NIP will build investor confidence as identified projects are likely to be better prepared, exposures less likely to suffer stress given active project monitoring, thereby less likelihood of NPAs.

Objectives of National Infrastructure Pipeline

• It will facilitate the growth of businesses, create jobs, improve ease of living, and provide equitable access to infrastructure for all, making society more inclusive.
• It will help increase economic activity and create additional Fiscal space by improving the revenue base of the government.
• It will provide planned development of projects, better preparation for project bidding, reduce aggressive bids/ failure in project delivery, ensure enhanced access to sources of finance as a result of increased investor confidence.

Significance of National Infrastructure Pipeline

• Economic growth: It is anticipated that India will require $4.5 trillion in infrastructure spending by 2030 to maintain its current growth pace. The National Infrastructure Pipeline (NIP) is working to make this happen as quickly as possible.
• Employment: A well-planned NIP will allow more infrastructure projects, businesses to develop, jobs to be created, living conditions to improve, and equitable access to infrastructure for all, resulting in more inclusive growth.
• Fiscal space: Well-developed infrastructure boosts economic activity, frees up fiscal space by increasing the government's tax base, and guarantees that government spending is concentrated on productive areas.
• Better Projects: National Infrastructure Pipeline will ensure that infrastructure projects are properly planned and implemented. It will provide a clearer picture of project supply, more time to prepare for project bidding, less aggressive bids/project failures, and improved access to capital sources as a result of higher investor trust.
• Benefits to agriculture: It will improve agricultural and rural infrastructure. Irrigation and rural infrastructure projects will cost a total of 7.7 lakh crore.
• Connection: It would improve India's connectivity, particularly in rural areas. Road construction will cost Rs. 19.63 lakh crore, while railway developments will cost Rs. 13.68 lakh crore.
• Credit: Due to the ongoing NPA issue and a lack of credit creation in the economy, there is a dearth of private investment. As a result, the government must invest from its own funds to give the economy a boost.

Limitations Associated with National Infrastructure Pipeline

• It puts increased pressure on the banking sector as they are recovering from NPA problems and if pushed to fund for this project they may further face the NPA crisis.
• It is a project of immense scale and volume and therefore its implementation will not be easy. Coordination among various levels of government is a must.
• Land acquisition is a big challenge for the completion of infrastructure projects.
• Displacement and therefore rehabilitation of millions of people is a difficult task