National Infrastructure Pipeline (NIP) Explained

January 6, 2020

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. The challenge is to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy. Hon’ble Prime Minister in his Independence Day-2019 speech highlighted that Rs.100 lakh crore would be invested on infrastructure over the next five years including social and economic infrastructure projects. Union finance minister Nirmala Sitharaman unveiled Rs 102 lakh crore of infrastructure projects, under National Infrastructure Pipeline, that will be implemented in the next five years as part of the government’s spending push in the infrastructure sector.

National Infrastructure Pipeline

National Infrastructure Pipeline Mission

The mission is to:

  • Develop a 5-year plan of infrastructure development for India in key sectors
  • Facilitate design, delivery and maintenance of public infrastructure as per global standards
  • Facilitate generic and sectoral reforms in regulation and administration of public infrastructure services as per global best practice
  • Push India up in global rankings in public infrastructure

Strategic goals under NIP

  • Provide a positive and enabling environment for significant private investment in infrastructure at all three levels of government
  • Design, deliver and maintain public infrastructure projects to meet efficiency, equity and inclusiveness goals
  • Design, construct and maintain public infrastructure to meet disaster resilience goals
  • Create a fast track institutional, regulatory and implementation framework for Infrastructure
  • Benchmark infrastructure performance to global best practices and standards
  • Leverage technology to enhance service standard, efficiency and safety.

National Infrastructure Pipeline Task Force

To achieve the objective of NIP, a Task Force was constituted to draw up the National Infrastructure Pipeline (NIP) for each of the years from FY 2019-20 to FY 2024-25 with the approval of the Finance Minister. The Task Force is chaired by Secretary, DEA with CEO (NITI Aayog), Secretary (Expenditure), Secretary of the Administrative Ministries, and Additional Secretary (Investments), DEA as members and Joint Secretary (IPF), DEA as Member Secretary

National Infrastructure Pipeline Sector-wise Expenditure

The Sector-wise break-up of project capital expenditure worth Rs 102 lakh crore during FY20-25 is as under:

  • Energy- 24%
  • Roads- 19%
  • Railways- 13%
  • Ports- 1%
  • Airports-1%
  • Urban-16%
  • Digital Communication- 3%
  • Irrigation-8%
  • Rural Infrastructure-8%
  • Agriculture and Food Processing Infrastructure-1%
  • Social Infrastructure-3%
  • Industrial Infrastructure-3%

NIP

Key benefits of National Infrastructure Pipeline

  • Economy – Well-planned NIP will enable more infra projects, grow businesses, create jobs, improve ease of living, and provide equitable access to infrastructure for all, making growth more inclusive
  • Government – Well-developed infrastructure enhances level of economic activity, creates additional fiscal space by improving revenue base of the government, and ensures quality of expenditure focused in productive areas
  • Developers – Provides better view of project supply, provides time to be better prepared for project bidding, reduces aggressive bids/ failure in project delivery, ensures enhanced access to sources of finance as result of increased investor confidence.
  • Banks/ Financial Institutions (FIs)/ Investors – Builds 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.

National Infrastructure Pipeline Funding Pattern

The Centre (39%) and states (39%) are expected to have equal share of the capital expenditure to be undertaken in the infrastructure sector, followed by the private sector (22%).

National Infrastructure Pipeline funding pattern

National Infrastructure Pipeline Video

 

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