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In the Economic Survey on Tuesday, the Centre has said that a synergy between public and private sectors is essential for India to give a fillip to its climate resilient infrastructure.
“As India has already submitted its long-term low-emission Development Strategy at COP27, the next leap would be towards advanced infrastructure. It is more energy efficient and incorporates the idea of a circular economy and transitions towards low-carbon development,” the Economic Survey said.
“The amount of investment that may be needed for putting in place climate-resilient and climate-resistant infrastructure might be too vast to be provided for by either the public sector or the private sector alone. Both financing and the creation of such infrastructure are likely to require public-private partnership (PPP),” it noted.
While energy has been a core area in India’s pursuit of net-zero carbon emissions, greener and more efficient logistics will also play a key part in realising these goals.
To that effect, a substantial part of the Rs 111-trillion National Infrastructure Pipeline (NIP) would be dedicated to transforming the national transportation infrastructure.
India has been trying to crowd in private investment for infrastructure ever since the onset of Covid in 2020.
The Centre remains hopeful that FY24 will be the year of significant private investment in infrastructure.
Industry estimates suggest that only 20-25 per cent of infrastructure financing comes from the private sector.
“A sustained increase in private capex is also imminent with the strengthening of the balance sheets of corporates and the consequent increase in credit financing it has been able to generate,” the Survey noted.
The push in private capex may augur well for the Centre’s own ambitions in PPP.
So far, the Public Private Partnership Appraisal Committee (PPPAC) of the Centre has cleared 79 projects with a total project cost of Rs 2.27 trillion from FY15 to FY23.
“While the Survey does capture an uptick in private capex during the first half of FY23, the quantum of private investment needs to improve significantly. This is particularly in sectors like infrastructure for growth to be sustainable,” said Arindam Guha, Partner, government & public services, Deloitte India.
The infrastructure push has also acted as a bulwark against global economic headwinds, according to the Centre.
“Today, we are operating in the new normal where the global economy is still recovering from the setback due to pandemic, and geo-political conflicts persist. India could effectively steer through the situation owing to its dedicated support to infrastructure creation through increased capex and strong macroeconomic fundamentals,” the Survey said.
Moreover, global economic concerns had also made prices of various commodities essential for infrastructure creation volatile, causing price escalations in several projects.
India will also look at a robust digital infrastructure, not solely for public services, but also to integrate stakeholders and expedite the push for physical infrastructure.
The Survey emphasised, “The synergy between physical and digital infrastructure will be one of the defining features of India’s future growth story.”
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