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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. This article will discuss the various aspects of the National Infrastructure Pipeline
that are important for aspirants preparing for the UPSC examination.
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What is National Infrastructure Pipeline?
This scheme was brought in so as to improve project preparation and
attract investments into infrastructure, which is essential for attaining the
target of becoming a $5 trillion economy by FY 2025.
It covers both economic and social infrastructure projects. The creation of
new infrastructure assets will provide impetus to employment and
generate income thus improving the overall competitiveness of the
economy.
Other Relevant Links
Infrastructure Financing Viability Gap Funding
Take-Out Financing Sector Specific Investment
Cluster Based Investment Models Foreign Investment Models
Need for National Infrastructure Pipeline
$5 trillion Goal: It will help achieve the goal of GDP of $5 trillion by 2024-
25, as a nation needs to spend about $1.4 trillion (Rs. 100 lakh crore) over
these years on infrastructure.
Inclusive growth: Uniform availability of robust infrastructure facilities is
essential to achieve broad-based and inclusive growth on a sustainable
basis.
Poor infrastructure: in various sectors of the economy has hampered the
growth potential of the nation.
Investor confidence: It will aid in building 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
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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
Conclusion
The National Infrastructure Pipeline was launched with a vision to boost infrastructure
development in the country. This would lead to the development of social and economic
infrastructure projects slated to be established over a period of five years with an initial
sanctioned amount of ₹102 lakh crore Infrastructure development being a labor intensive
sanctioned amount of ₹102 lakh crore. Infrastructure development being a labor-intensive
sector would help increase the employment opportunities as well and help stimulate economic
growth
Other Relevant Links
Indian Economy Notes Investment Models
Types of Investment Models Sources of Investment
Definition of Investment Need for Investment
Infrastructure Industry
Manufacturing Sector in India Core industries
Index of industrial production Disinvestment
MCQs
Question: Which of the following is not a public good?
(a) Electricity
(b) National Defence
(c) Light House
(d) Public Parks
Answer: (a) See The Explanation
Question: Given below are two statements one is Assertion (A) and the other is labeled as
Reason
Assertion (A): Government has launched the National Infrastructure Pipeline for a period of
2020-30.
Reason(R): The objective of NIP is to provide equitable access to infrastructure to all.
Select the correct answer using the codes given below.
(a) Both (A) and (R) are true and ( R) is the correct explanation of (A).
(b) Both (A) and (R) are true but ( R) is not the correct explanation of (A)
(b) Both (A) and (R) are true but ( R) is not the correct explanation of (A).
(c) (A) is true but (R) is false.
(d) (A) is false but (R) is true.
Answer: (d) See The Explanation
Other Relevant Links
Indian Polity Notes Indian Economy Notes
Art and Culture Notes Governance Notes
Ancient India History Notes Medieval India History Notes
Modern India History Notes Geography Notes
Science And Technology Notes Environment And Ecology Notes
Post Independence Notes Society Notes
Internal Security Notes Ethics Notes
Disaster Management Notes World History
International Relations Social Justice Notes
CSAT Notes Government Scheme Notes
*The article might have information for the previous academic years, please refer the official
website of the exam.
National Infrastructure Pipeline
drishtiias.com/printpdf/national-infrastructure-pipeline-1
Why in news
Government has released Report of the Task Force on National Infrastructure Pipeline for
2019-2025.
Prime Minister in his Independence Day speech 2019 had highlighted that ₹100 lakh
crore would be invested on infrastructure over the next 5 years.
The emphasis would be on ease of living: safe drinking water, access to clean
and affordable energy, healthcare for all, modern railway stations, airports, bus
terminals and world-class educational institutes.
Task Force was constituted to draw up the National Infrastructure Pipeline (NIP)
for each of the years from financial years 2019-20 to 2024-25.
NIP will enable a forward outlook on infrastructure projects which will create jobs,
improve ease of living, and provide equitable access to infrastructure for all, thereby
making growth more inclusive.
NIP includes economic and social infrastructure projects.
During the fiscals 2020 to 2025, 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.
It has outlined plans to invest more than ₹102 lakh crore on infrastructure
projects by 2024-25, with the Centre, States and the private sector to share
the capital expenditure in a 39:39:22 formula.
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Source: The Hindu
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Government's Disinvestment Plans
drishtiias.com/printpdf/government-s-disinvestment-plans
Why in News
Recently, the Ministry of Finance has extended the bidding deadlines for the strategic
disinvestment of Pawan Hans by a month, citing logistical challenges faced by interested
bidders due to the Covid-19 pandemic.
Pawan Hans Limited is a helicopter service company based in New Delhi. It is a
Mini Ratna-I category Public Sector Undertaking.
Key Points
Background:
Government's Disinvestment Target for 2020-2021: Government plans
to raise Rs. 2.1 lakh crore through disinvestment in 2020-21, with just about
Rs. 14,000 crore raised so far through minority stake sales.
New Public Sector Policy: As part of the ‘Aatmanirbhar Bharat Abhiyan’
package, the government in May 2020 had announced that there will be a
maximum of four public sector companies in the strategic sectors, and state-
owned firms in other segments will eventually be privatised.
Under the policy, a list of strategic sectors will be notified where there
will be at least one and a maximum of four public sector
enterprises, apart from private sector companies.
In other sectors, central public sector enterprises (CPSEs) will be
privatised, depending on the feasibility.
Current Situation:
The Bidding deadline for the disinvestment of Pawan Hans has been
extended by a month.
Strategic sales of public sector firms like Air India and Bharat Petroleum
Corporation Limited (BPCL) are unlikely to conclude this year.
Further amendments are needed to the LIC Act of 1986 to list the Life
Insurance Corporation of India on the markets.
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Need for Disinvestment Proceeds:
There is a pressure on the government to raise resources to support the
economic recovery and meet expectations of higher outlays for healthcare.
The increase in public spending in the upcoming Budget will have to be
financed to a large extent by garnering disinvestment proceeds and monetising
assets.
To eliminate the need for the government’s involvement in non-
strategic areas.
Disinvestment
Disinvestment means sale or liquidation of assets by the government, usually
Central and state public sector enterprises, projects, or other fixed assets.
The government undertakes disinvestment to reduce the fiscal burden on
the exchequer, or to raise money for meeting specific needs, such as to bridge the
revenue shortfall from other regular sources.
Strategic disinvestment is the transfer of the ownership and control of a
public sector entity to some other entity (mostly to a private sector entity).
Unlike the simple disinvestment, strategic sale implies a kind of privatization.
The disinvestment commission defines strategic sale as the sale of a
substantial portion of the Government shareholding of a central public
sector enterprises (CPSE) of upto 50%, or such higher percentage as the
competent authority may determine, along with transfer of management control.
The Department of Investment and Public Asset Management (DIPAM)
under the Ministry of Finance is the nodal department for the strategic stake sale in the
Public Sector Undertakings (PSUs).
Strategic disinvestment in India has been guided by the basic economic principle that
the government should not be in the business to engage itself in
manufacturing/producing goods and services in sectors where competitive
markets have come of age.
The economic potential of such entities may be better discovered in the hands of
the strategic investors due to various factors, e.g. infusion of capital,
technology up-gradation and efficient management practices etc.
Source:TH
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National Monetisation Pipeline
Why in News
Recently, the government of India has launched the National Monetisation Pipeline (NMP). The NMP
estimates aggregate monetisation potential of Rs 6 lakh crores through core assets of the
Central Government, over a four-year period, from FY 2022 to FY 2025.
The plan is in line with Prime Minister's strategic divestment policy, under which the
government will retain presence in only a few identified areas with the rest tapping the private
sector.
//
Key Points
About the NMP:
It aims to unlock value in brownfield projects by engaging the private sector,
transferring to them revenue rights and not ownership in the projects, and using
the funds generated for infrastructure creation across the country.
The NMP has been announced to provide a clear framework for monetisation and give
potential investors a ready list of assets to generate investment interest.
Union Budget 2021-22 has identified monetisation of operating public infrastructure
assets as a key means for sustainable infrastructure financing.
Currently, only assets of central government line ministries and Central Public
Sector Enterprises (CPSEs) in infrastructure sectors have been included.
The government has stressed that these are brownfield assets, which have been “de-
risked” from execution risks, and therefore should encourage private investment.
Roads, railways and power sector assets will comprise over 66% of the total
estimated value of the assets to be monetised, with the remaining upcoming sectors
including telecom, mining, aviation, ports, natural gas and petroleum product pipelines,
warehouses and stadiums.
In terms of annual phasing by value, 15% of assets with an indicative value of Rs
0.88 lakh crore are envisaged for rollout in the current financial year.
The NMP will run co-terminus with the Rs 100 lakh crore National Infrastructure
Pipeline (NIP) announced in December 2019.
The estimated amount to be raised through monetisation is around 14% of the
proposed outlay for the Centre of Rs 43 lakh crore under NIP.
NIP will enable a forward outlook on infrastructure projects which will create jobs,
improve ease of living, and provide equitable access to infrastructure for all,
thereby making growth more inclusive. NIP includes economic and social
infrastructure projects.
Other Initiatives for Infrastructure Development include Scheme of Financial
Assistance to States for Capital Expenditure, Industrial corridors, etc.
Monetisation
In a monetisation transaction, the government is basically transferring revenue rights to
private parties for a specified transaction period in return for upfront money, a revenue
share, and commitment of investments in the assets.
Real Estate Investment Trusts (Reits) and Infrastructure Investment Trusts (Invits), for
instance, are the key structures used to monetise assets in the roads and power sectors.
These are also listed on stock exchanges, providing investors liquidity through secondary
markets as well.
While these are a structured financing vehicle, other monetisation models on PPP (Public Private
Partnership) basis include:
Operate Maintain Transfer (OMT),
Toll Operate Transfer (TOT), and
Operations, Maintenance & Development (OMD).
Greenfield vs Brownfield Investment
Greenfield Project:
It refers to investment in a manufacturing, office, or other physical company-related
structure or group of structures in an area where no previous facilities exist.
Brownfield investment:
The projects which are modified or upgraded are called brownfield projects.
The term is used for purchasing or leasing existing production facilities to launch a
new production activity.
Associated Challenges:
Lack of identifiable revenue streams in various assets.
The slow pace of privatisation in government companies including Air India and
BPCL.
Further, less-than-encouraging bids in the recently launched PPP initiative in trains
indicate that attracting private investors' interest is not that easy.
Asset-specific Challenges:
Low Level of capacity utilisation in gas and petroleum pipeline networks.
Regulated tariffs in power sector assets.
Low interest among investors in national highways below four lanes.
Konkan Railway, for instance, has multiple stakeholders, including state
governments, which own stake in the entity.
Way Forward
Execution is the Key: While the government has tried to address many challenges, owing to
infrastructure development in the NMP framework, execution of the plan remains key to its
success.
Dispute Redressal Mechanism: Further, there is a need for an efficient dispute resolution
mechanism.
Multi-Stakeholder Approach: The success of the infrastructure expansion plan would depend on
other stakeholders playing their due role.
These include State governments and their public sector enterprises and the private sector.
In this context, the Fifteenth Finance Commission has recommended the setting up of a
High-Powered Intergovernmental Group to re-examine the fiscal responsibility legislation of
the Centre and States.
Source: PIB
PDF Refernece URL: https://www.drishtiias.com/printpdf/national-monetisation-pipeline
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Bharatmala Project
A total of 225 road projects with an aggregate length of 9,613 km have been appraised and approved till
March, 2019 under Bharatmala Pariyojana.
Objectives
Optimizing efficiency of the movement of goods and people across the country.
Generating large number of direct and indirect employment opportunities in the construction &
infrastructure sector and also as part of the enhanced economic activity resulting from better road
connectivity across the country.
Connecting 550 Districts in the country through NH linkages.
Highlights of Bharatmala Pariyojana
It calls for improvement in efficiency of existing corridors through development of
Multimodal Logistics Parks and elimination of choke points.
It enhances focus on improving connectivity in North East and leveraging synergies with
Inland Waterways.
North East Economic corridor enhancing connectivity to state capitals and key towns.
Multimodal freight movement via 7 Waterway terminals on River Brahmaputra – Dhubri,
Silghat, Biswanath Ghat, Neamati, Dibrugarh, Sengajan, Oriyamgh.
It emphasis on the use of technology & scientific planning for project preparation and asset
monitoring.
It calls for seamless connectivity with neighboring countries:
24 Integrated check posts (ICPs) identified
Transit through Bangladesh to improve North East connectivity
Integrating Bangladesh – Bhutan – Nepal and Myanmar – Thailand corridors which will make
NorthEast hub of East Asia
Satellite mapping of corridors to identify upgradation requirements
Components of Bharatmala Project
//
PDF Refernece URL: https://www.drishtiias.com/printpdf/bharatmala-project
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Six Years of Digital India Programme
drishtiias.com/printpdf/six-years-of-digital-india-programme
Why in News
Recently, the Prime Minister of India addressed a virtual event to mark the completion of six
years of Digital Indian programme.
Key Points
Important Points of Address:
India’s Techade: The data and demographic dividend combined with India’s
proven tech prowess presents massive opportunity for the country, and this
decade will be ‘India’s techade’.
Highlighted Various Schemes of Digital India programme:
Diksha: It stands for Digital Infrastructure for Knowledge Sharing. It serves
as National Digital Infrastructure for Teachers. All teachers across the
nation will be equipped with advanced digital technology.
eNAM: It was launched on 14th April 2016 as a pan-India electronic trade
portal linking Agricultural Produce Market Committees (APMCs) across
the States.
eSanjeevani: It is a telemedicine service platform of the Ministry of Health
& Family Welfare.
DigiBunai: DigiBunai aids the weavers to create digital artwork and
translate the saree design to be loaded to the looms. DigiBunai™ is a first
of its kind Open Source software for Jacquard and dobby weaving.
PM SVANidhi scheme: The Ministry of Housing and Urban Affairs
(MoHUA) has launched Pradhan Mantri Street Vendor's AtmaNirbhar
Nidhi (PM SVANidhi), for providing affordable loans to street vendors. It
incentivises digital transactions by the street vendors.
Digital solutions during Covid-19: Contact tracing app, Aarogya Setu.
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Digital India Programme: It was launched in 2015. The programme has been
enabled for several important Government schemes, such as BharatNet, Make in
India, Startup India and Standup India, industrial corridors, etc.
Vision Areas:
Digital infrastructure as Utility to Every Citizen.
Governance and services on demand.
Digital empowerment of citizens.
Objectives:
To prepare India for a knowledge future.
For being transformative that is to realize IT (Indian Talent) + IT (Information
Technology) = IT (India Tomorrow).
Making technology central to enabling change.
On being an Umbrella Programme – covering many departments.
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Significant Achievements:
Digital Payments: The introduction of Unified Payments Interface (UPI),
which introduced the benefits of digital payments in every part of the
country.
From flourishing businesses to modest street vendors, UPI is helping
everyone with payments and transactions.
This also encourages a number of private players to provide
alternatives for digital payments which completely transformed the
Indian economy.
Easing the Operations of Businesses: The Electronic Customer
Identification System (e-KYC), the Electronic Document Storage System
(DigiLocker) and the Electronic Signature System (eSign) were introduced
to help businesses streamline their operations.
Beyond the JAM Trinity: What started as a simple step to kick off the JAM
trinity (Jan Dhan, Aadhar and Mobile) to weed out leakages in the system,
today empowered the entire vaccination drive for Covid, making India
only the second nation to USA that administered 20 crore vaccines.
Way Forward
There are many roadblocks in the way of its successful implementation like digital
illiteracy, poor infrastructure, low internet speed, lack of coordination among various
departments, issues pertaining to taxation etc. These challenges need to be
addressed in order to realize the full potential of this programme.
As we celebrate the six years of completion of Digital India, here are the six concrete
steps that can aid the digital transformation of the nation in the new normal for Digital
4.0 contributing to India’s success story and fulfilling the five trillion-dollar economy
dream.
Inculcation of scientific temper, where perception doesn’t drive policy.
Access to data and lower costs of devices especially smartphones.
High speed technology and seamless connectivity (5G, 6G).
Quality and local language content.
A secure and safe cyberspace with clear spaces for redressal, ombudsmen,
grievance redressal officers.
Renewable energy, seamless power supply, green technology and lastly
more and more government services to be brought online with more
departments talking to each other.
Tech solutions empowered by Digital India that has built the infrastructure for years
together today serve as a basis for other emerging interventions in the fields of
start-ups, digital education, seamless banking and payment solutions, agritech, health
tech, smart cities, e-governance and retail management.
Source: IE
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