A+ for infrastructure performance: Despite challenges, 9 areas of action stand out in NDA-II’s infrastructure record

An overview of the infrastructure sector over the past eight years provides evidence of fresh and bold thinking and the resulting shifts in policies, processes and practices. Here are nine thrust areas that together qualify for an overall A+.

First, when the NDA took charge of the Center in the summer of 2014, the NDA realized that confidence in public-private partnerships (PPPs) — the hallmark of the UPA era — had reached an all-time low. The NDA government quickly came to the conclusion that large amounts of government investment in infrastructure would necessarily be needed to get the momentum going and get the rest of the economy going. It then coupled this strategy with ever-increasing allocations of public funds. Infrastructure investments, which stood at Rs 6.3 trillion in FY14, are now expected to reach nearly Rs 16 trillion in FY 22.

Secondly, there was a fear that with the disappearance of the Planning Committee there would be no coherent action plan. While individual ministries got to work on their own plans and programs, the problem was finally solved with the announcement of the National Infrastructure Pipeline in 2020. It imposed a detailed roadmap, including India’s macroeconomic target of around 8%. achieve Gross capital formation in infrastructure (GCFI, as a percentage of GDP). The government took it a step further by trying to create a virtuous cycle in which the financing of government spending is also fueled by the proceeds from the monetization of state assets, as embodied in the National Monetization Plan.

The third, and more dramatic shift, was the strategy adopted for supplying utilities to the aam aadmi. It would no longer rely on incremental efforts but pull out all the stops in “mission mode” to get water and electricity to reach 100% of Indian households. This stands out today as one of the largest efforts to improve the “quality of life” of all emerging economies.

Fourth, the last eight years have seen a massive increase in transport connectivity to poorly maintained parts of the country, as evidenced by the increase in rail and road services for remote areas (particularly the Northeast and J&K), as well as the opening up air services to hitherto unexplored cities. The rural roads program has continued to make significant strides in rural areas. For urban commuters, metro rail systems were activated for most major cities in India.

Fifth, the emphasis on a cleaner India, Swachh Bharat, ensured that many initiatives were strongly encouraged. Particularly noticeable was the push for ODF (Open Defecation Free) communities and river cleaning. A series of wastewater treatment plants has been set up to prevent direct discharge into rivers. The fact that Indian Railways has now fitted 100% of its passenger carriages with biodegradable toilets, which are open-drain-barriers, has not been sufficiently noted.

Sixth, it is widely recognized that India has taken a decisive stance on green energy. India’s achievements in renewable energy are publicly visible, and the recent efforts for 100% electrification of rail, electric vehicles and the Hydrogen Mission are testament to its strong commitment to carbon reduction. India’s leadership in the International Solar Alliance has been widely recognized, as have its commitments to climate change goals.

Seventh, going beyond renewables, it is the road and highway sector that has remained the shining star of the infrastructure sector – even amid two years of severe Covid-related project implementation challenges. Add to that advancements on FastTag, monetization through InVits, and the shift to greenfield highways (from the earlier lane widening)—all this has earned well-deserved accolades for leadership.

Eighth, in terms of processes, three initiatives stand out for their expected huge potential impact on operations. The first is the iconic Gati Shakti platform that uses a multi-layered and advanced GIS to better design and monitor infrastructure projects. Then there is the National Single Window System to be able to process all permissions and permissions on an e-platform. Finally, there is the semi-revolutionary circular of October 29, 2021 from the Ministry of Finance on changes in public procurement policy, which is the root of the much-discussed “L1 raj” (lowest cost procurement system) and the scourge of late payments.

Ninth, possibly for the first time in India’s economic history, the ability to finance infrastructure projects has reached a level of maturity during this period. Between the spending of the Union budget, the share of the states, PSU and extra-budgetary resources and domestic and foreign investment (including the development of InVits and REITs), financing is no longer the effective constraint. The creation of the DFI, NABFID (National Bank for Financing Infrastructure and Development), is expected to significantly increase its long-term financing capacity.

Rating scales are known to go beyond an A, up to AA and AAA levels. So why only an A+?

Well, it must be admitted that there have been challenges and shortcomings along the way. A number of areas stand out as ‘unfinished agenda’. One is the renewal of institutional systems and processes to revive interest in PPPs. The other is the much-needed “surgical strike” for the overhaul of India’s electricity distribution sector. The much vaunted development of inland shipping and short sea shipping is still in progress. The popular belief is that the Smart Cities program failed to deliver on its promise. The bullet train is way behind schedule. India’s energy diversity has been neglected, especially with regard to hydropower and the civilian nuclear programme. The Department of Statistics and Program Execution calculates that there is a ‘4 trillion hit’ due to cost overruns of stalled and delayed infrastructure projects.

Nevertheless, it must be recognized that India has developed into the largest infrastructure development market in the world. US resident Joe Biden has drawn up a $1 trillion plan to renew US infrastructure. India’s National Infrastructure Pipeline Is $1.4 Trillion!

So A+ it is.

(The writer is an infrastructure expert, and founder & managing trustee, The Infravision Foundation; opinions are personal)

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