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Informist, Friday, Jan. 31, 2025

NEW DELHI – The Economic Survey for 2024-25 (Apr-Mar), tabled in Parliament by Finance Minister Nirmala Sitharaman on Friday, said the government's efforts on infrastructure building through public spending need to be supplemented by reciprocation from the private sector. "The efforts of the Union government would need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country," the survey said.

Private participation should accelerate in many critical infrastructure sectors in many ways--programme and project planning, financing, construction, maintenance, monetisation, and impact assessment, it added. 

The government pressed the pedal on capital expenditure in the post COVID-19 era to revive growth and crowd-in private investments. However, there has been a slowdown in public spending in the current financial year owing to election-related restrictions. At the same time, private capital expenditure continues to be frail. 

"Despite such earnest efforts by the Union government and quite a few state governments and public sector undertakings supplementing these efforts with increased capex, there is still a significant unmet demand for infrastructure development," the government said in the survey.

The economic survey, authored under the leadership of Chief Economic Adviser to the government V. Anantha Nageswaran, said that private sector investment growth may have remained subdued so far in FY25 on account of the domestic political timetable, global uncertainties and overcapacities. However, private sector order books have shown steady growth, alongside a rise in investment intentions, it said. 

In the last five years, the government has more than trebled its capital spending, and that has been the main driver of India's growth since the pandemic. The Economic Survey further added that India needs continued stepping up of infrastructure investment over the next two decades to sustain a high rate of growth. It also said that the government was bringing "innovative frameworks" to attract investment in infrastructure projects.

One such initiative was the National Monetisation Pipeline that was launched in August 2021 to boost private investment in brownfield assets. For FY25, the aggregate monetisation target is set at INR 1.91 trillion, the survey said. 

The survey also said that development financial institutions are key players in supporting funding for infrastructure development. The National Bank for Financing and Infrastructure Development, set up in 2021, is targeting to sanction loans aggregating over INR 3 trillion by the end of FY26, it added.

Identifying areas in which the private sector should increase their spending, the Economic Survey said that research and development need more contribution from private players as, currently, it is "predominantly sourced from government entities."  End

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

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