India lists $1.4t infrastructure projects for next five years
Hours before the year 2019 came to a close with horrid economic data, India’s finance minister Nirmala Sitharaman on Tuesday said that the government had shortlisted infrastructure projects worth Rs 102 lakh crores (over $1.4 trillion) that it would be spending on in the next five years, reports Business Insider. These announcements are likely to find allocations in the upcoming budget on February 1. This will be a big opportunity for construction companies like Larsen and Toubro, GMR Group, IRB Infrastructure, companies in the Adani Group, road construction companies Dilip Buildcon, Sadbhav Infra, cement majors like Ultratech, Shree Cement etc, to name a few. This will include projects of the India Railways and that will benefit stocks like Kalindee Rail, Texmaco, and Titagarh Wagons, according to the report. This is part of the promise made by the prime minister Narendra Modi at the peak of the election campaign. While the manifesto of the Modi-led political outfit, the Bharatiya Janata Party (BJP), lacked details, data showed that projects worth nearly half that amount, over $600 billion, are already in various stages of planning or implementation. The money spent in each subsequent year, including the current one will be as follows: FY20 Rs 13.6 lakh crore, FY21 Rs 19.5 lakh crore, FY22 Rs 19 lakh crore, FY23 Rs 13.8 lakh crore and FY24 Rs 12.8 lakh crore. Sitharaman confirmed the same saying that, even according to the latest government estimate, 43 per cent of the projects are already under various stages of implementation. ‘Centre will spend 39 per cent of the investment, 39 per cent will come from state governments, and the rest will come from private sector,’ she added. An online dashboard will be set up for everyone to monitor the progress of each project. There will also be an annual supplementary report that will be released with updates on the projects. The steps taken by the government have come at a time when economic growth has fallen to a six-year low, largely due to lack of risk appetite and credit flow in the private sector. The minister said that a big part of the thrust now would be to improve financing for these projects including setting up of a financing institution as well as deepening India’s bond market. She said that the projects identified were in sectors such as power, railways, urban irrigation, mobility, education and health, adds Press trust of India. Nearly Rs 25 lakh crore energy projects have been lined up, the minister said, adding that another Rs 20 lakh crore in road and nearly Rs 14 lakh crore railway projects have been lined up. She said that the projects in power included renewable sector, railways, urban development, irrigation, mobility, education, health, water and digital. These sectors will form the bulk of the infrastructure investment under National Infrastructure Pipeline being announced on Tuesday, Sitharaman said. The finance minister said Rs 102 lakh crore National Infrastructure Projects will help make India a $ 5 trillion economy by 2025. ‘The spending from the budget will also increase in consonance with the resources available,’ Atanu Chakraborty, secretary at the Department of Expenditure, said in a bid to assure the market that the fiscal deficit will remain under control. His ‘broad’ estimate is that by 2025, the expenditure on these projects will be 1.1 per cent of GDP, which is a ‘fairly doable outflow from the budget’, according to him.
Source – New Age
