As Finance Minister Nirmala Sitharaman had earlier said that Budget for 2021-22 will sustain the momentum of public spending on infrastructure to ensure the economic revival, the sector is already foreseeing some big announcements.

“We shall definitely sustain the momentum of public spending in infrastructure. Because that is the one way we assure that the multipliers will work and the economy’s revival will be sustainable,” she had said at the Assocham Foundation Week.

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In 2019, Prime Minister Narendra Modi launched one of the biggest projects for the sector, the National Infrastructure Pipeline (NIP) for FY 2020 to FY 2025, with the initial investment of Rs 102 lakh crore, for the development of a group of social and economic infrastructure projects in India. 

As per NIP, nearly 7,400 projects have been included under the ambit of NIP within more than 30 sub-sectors out of which about 1,800 projects are already under development. It currently comprises 39% investment by the Centre, 39% by states and 22% from the private sector.

However, according to a The Hindu report by Kushal Kumar Singh, Infrastructure Consultant with Deloitte India, the COVID-hit government is now focusing on undertaking measures to tame the pandemic’s impacts rather than strategising for achieving the ambitious project.

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Singh suggests that the road to recovery lies in the word ‘sustainability’. The government should focus on ‘sustainability’ by broadening the investor base and attracting long term funding as the current infrastructure financing set up is primarily driven by commercial lending institutions. Rebalancing the risk of public-private partnership (PPP) system and introducing a resilient policy framework for the same will also help the country’s infrastructure to reboot itself.

In an interview with The Economic Times, former RBI Governor and economist Raghuram Rajan said, “the government has to prioritise spending which means focus on what is essential.”

Rajan asserted that one of the best ways to get the COVID-hit economy back on track is doing the spending on infrastructure.

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“Much of it is done by state governments rather than central governments and so getting the money out to the states is quite important. This is the wrong time to stop the states,” he said.

As per a report by CMD of Rodic Consultants, Raj Kumar, published in The Financial Express, the finance ministry has already notified the VGF (viability funding gap) Scheme. Through this, selected infrastructure projects would be given financial aid for facilitating implementation. Up to Rs 200 crore funding would be cleared by an Empowered Committee (EC) and above Rs 200 crore by the finance minister, according to the Economic Affairs Secretary. 

A Rs 1.46-trillion scheme, Production-Linked Incentive (PLI), aiming at attracting global manufacturers to boost indigenous manufacturing is another initiative by Centre. It is in sync with the ‘Atmanirbhar mission’. 

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However, putting all of this aside, the government prominently requires to strictly focus on the beginning and successful closure of its projects. 

As per a report from the Union Ministry of Statistics and Programme Implementation, out of the 1,634 infrastructure projects it tracks, as many as 552 were delayed. That means one of the three projects was delayed, Kumar informed.

Budget 2021 should also gear up new projects highways, bridges, roadways, railways and ports considering the G20 meet will be hosted by India in 2022. 

The Budget for 2021-22 fiscal is set to be tabled in Parliament on February 1.