The Big Picture - Strengthening India's Infrastructure

In line with its election promise of Rs 100 trillion investment in the infrastructure sector by 2024, the NDA government would be targeting low-hanging fruits, such as Metro projects, inland waterways, natural gas grids and airport privatisation, to give a fillip to private sector investment in the first few months of its tenure. Getting private sector back in a big way would be the topmost priority since the government has a limited fiscal headroom. Fitch said in a May 24 report that reducing general government debt to 60 per cent of the GDP ceiling by FY25, from the rating agency’s 68.8 per cent of the GDP in FY19 would require a significant deficit reduction of about 0.5 per cent of GDP annually. The government’s own budgetary support would, therefore, be largely limited to creating infrastructure support for agriculture, IT in education and digital networks for its social outreach programmes. The road sector, however, would have to continue to depend on borrowings and budgetary resources, like the railways. The last five years have seen massive spending in roads, railways, water, irrigation and urban infrastructure. On this edition of the big picture we will analyse the new government’s thrust on Infrastructure.

Guest - A.K. Bhattacharya, Editorial Director, Business Standard,
Bhanuchandar Nagarjan, Former Consultant, The World Bank, Washington DC,
K.T. Ravindran, Head of Urban Design, School of Planning and Architecture,

Anchor - Frank Rausan Pereira

[ravikukade]

Thanks...Frank Rajan parera...and All guests...❣️❣️❣️

[harshvardhan]

* BJP's manifesto : 100 trillion Rs. Investment in Infra by 2024
* Focus on : Metro projects, inland waterways, natural gas grids and airport privatisation
* Need :

* Social Infra :

* PURA (Provision of Urban Infra in Rural areas) center : Edu, Health : MH has been successful
* Funds :

* Private and Foreign Since Govt funding limited due to fiscal discipline
* Long term Infra Financing Agency : To deal with Asset Liability mismanagement
* RBI eased Foreign Investment in Municipal bonds (India = $500mn market of Muni Bonds while in US $3.5trn)
* Municipal Infra

* Surat : Proper taxation, Self reliance
* Problem :

* Lack of Urbanisation policy
* Need :

* Recovery Mechanism needed to attract investment
* Smartening PDS
* Maintain existing infra :

* Ex. Existing Electricity connection in Rural areas
* Debt reached Pre-UDAY levels
* Achievement :

* Saubhagya Scheme :

* 2.6 Cr people given Electricity Connection
* Rural roads
* 100 Operational Airports
* Meghalaya, Tripura and Mizoram came under India's rail map
* Arunachal Pradesh on Air Map
* Domestic Air Traffic passengers doubled in last 5 years
* 27km Highway everyday => Largest in World
* Container freight movement on Inland Waterways

[hemantsingh]

- Long term return
-27 km per day
-Kelkar committee
1 lakh crore
problems --and acquisition /long investment /
smart cities
long term financial investment institutions separate
municipal infrastruturee Surat good ex /municipal bonds
no urbanization policy
public distribution system
smartening of other systems to service cities infrastructure

[sandeshkadam]

India need more investment in agriculture infrastructure

[shashiketan]

Goal - Rs 100 trillion investment in the infrastructure sector by 2024

Need to strengthen?
- Aspiration 5 trillion economy
- Strong infra & high human capital
- Urbanization & infrastructure: Chicken & egg problem, hence need investment to drive urbanization.
- Rural infra for Rural - Urban migration & hospital, education, large level goods center

Various Aspects of Infrastructure building:
- Urban Area: road, rail, water, air: public transport, water, railways, social infra.
- Metro projects, inland waterways, natural gas grids and airport privatization
- PURA - provision of urban infra in rural areas: marginal implementation in Maharashtra
cluster of settlements have to be identified
- Municipal infra - visible impact water & sewerage
- Smartening our public collection & distribution - virtual infra
our cities are large centers of distribution of goods - mandis, agri. need to build regional network of infra to serve cities much better distribution system would lead to less loss in transport, PDS
- Operation & maintenance is as important.
SAUBHAGYA scheme for electrification but now tussle between state govt, power companies & distribution companies.

Focus so Far:
- The last five years have seen massive spending in roads, railways, water, irrigation and Electricity.
SATAT - rural roads speed 27km/day
- 'nal pe jal' for next 5 yrs
- Avg annual growth in infra financing - 10% in last 5 yrs - 9.62 lakh cr

Challenges:
- Adequate support from private sector
- Govt less fiscal space:
Fitch said in a May 24 report that reducing general government debt to 60 per cent of the GDP ceiling by FY25, from the rating agency’s 68.8 per cent of the GDP in FY19
would require a significant deficit reduction of about 0.5 per cent of GDP annually
- Asset - liability mismatch: Short term borrowing & long term financing.
- Land acquisition & environment issues.

Solutions:
- Infrastructure financing: raising long term market & funding Long term projects: help to get rid of NPA problems
- Assessing risk: each project has different project risk profile
- Easing of norms for foreign investing.
- Recovery mechanism & viable tariff
: to pull in private & foreign investors.
- Indian municipal bond market: US - $3 trillion in India $500 mn
- Improving capacity at local levels.
success story in Surat: municipality - taxation & collection
- Planned Urbanization:
no urbanisation policy at all, 1988
lack of planning Smart cities: 100 new cities -> 100 existing cities -> area based development

Infrastructure investment should be key focus in order for India to be a global power.

[vikash]

I wanted to hear some remarks on infrastructure development in the north-east and central tribal belt of India along with social infrastructure development

[hemantsingh]

pura -maharashtra(provisional of urban infrastructure in rural areas ) Dr Abdul Kalam Azad

[krishnanunnimadathil]

Is Mr Bhattacharya not simply suggesting going through the same rathole in the form of IL&FS; which is the precursor to the infrastructure lending institution he talks about? At some point, there needs to be serious considerations for increasing the scope of bond financing for projects - this is how pretty much all of Europe's infrastructure was built - this is also how America's infrastructure was built and is being upgraded. Bond market liberalisation is the key to India's infrastructure growth.

[sandeshkadam]

Ous farmers took path of suicide. Please protect farmers

[informedbeing]

Superb Msg :Operation and maintenance of existing infrastructure is also important issue along with creating new one🚝🚈🚡🛣🚢🌍

[wanderer]

What about raising the money by infra bond with attractive profit return.

[bigdreamer]

India needs more invest on education then infrastructure will built.

[madhavisingh]

Some one should write summary of the program in coment box

[subash]

bhattacharya keeps reiterating the same infra financing point, otherwise good episode

[Gyangangaa]

Govt is doing his best to meet public daily neddy infrastructure like load and electricity... There is saying that where is road there is development..So govt easy norms bring lots of FDI and private sector is also going to boost his investment .

[krishnachaithanya]

Regarding Infrastructure Development which means Roads, Railways, Aviation, and water ways. We need better Infrastructure because lot of trade happens through these mediums. We see NDA government looking to Improve trade through water geographically being Peninsula we have better advantages in logistics trade. Most of the trade happens through waters
Indian government came up with sagarmala project to develop the ports increase the capacity of the ports . For development in logistics sector we need better roadways for transportation of goods and services within the sub continent. Despite high prices of Aviation fuel water is cheapest way for doing business. Municipal bonds is a great idea where foreign investors are attracted to buy bonds which increases our development in municipal sector. Resources utilization should be top priority. We have less water resources in our country investment in River linking projects and Water dams will provide lot of water for irrigation and also for industrial usage. Even maintenance of built infrastructure should be taken care .

[niteshgoswami]

As far as infrastructure is concern India has done a a lot but ofcourse a lot to be done. 100 trilian rupee is enough for development of infrastructure. I think India is doing its best.

[shrutisingh]

Login to scorhigh for Rajya Sabha tv summary

[avinashkumar-ipyn]

Infrastructure is much needed, even China has made world class infrastructure. The Hindu calls making Roads is "Sadak Chhap Development".

On another hand, PM should work on transformation of education sector investing money to without transformation will go in vain as teachers in rural village use to take rice to their home of mid-day meal scheme. We need transformation first, then investment.

[ravisarkar]

Mr Perera do not speak while guests speak as it is difficult understanding.