Terming investment in infrastructure "quintessential" to boost growth, the Economic Survey on Friday said post unlocking of the economy, infra sectors are poised for growth and construction of roads is expected to return to the high pace attained before COVID-19.
The infrastructure sector will be the key to overall economic growth and macroeconomic stability, the Survey said emphasising that the year after the crisis (2021-22) will require sustained and calibrated measures to facilitate the process of economic recovery and enable the economy to get back on its long-term growth trajectory.
"Basic infrastructure facilities in the country provide the foundation of growth. In the absence of adequate infrastructure, the economy operates at a suboptimal level and remains distant from its potential and frontier growth trajectory.
"The strong backward-forward linkages of the infrastructure sector are well established. Therefore, investment in infrastructure is quintessential for more rapid and inclusive economic growth," the Economic Survey tabled in Parliament said.
Asserting that Rs 111 lakh crore National Infrastructure Pipeline for 2020-2025 will be a game-changer for the Indian economy, the Survey said sectors like energy, roads, urban infrastructure, railways have a lion's share in it that will help boost growth.
To boost private investment in infra sector, it said the government has set up the Public Private Partnership Appraisal Committee (PPPAC) for appraisal of PPP projects.
In 2020-21, PPPAC recommended 7 projects with total project cost of Rs 66,600.59 crore. Out of these 7 projects, 1 is a telecom sector project, 3 are railway sector projects, 2 are MHA sector projects and 1 is port sector project, it said.
To boost the sector, in the current fiscal year, the government approved the continuation of the revamped Infrastructure Viability Gap Funding (VGF) scheme till 2024-25.
Revamping of the proposed VGF scheme will attract more PPP projects and facilitate the private investment in social sectors (health, education, waste water, solid waste management, water supply etc.), it said.
About highways, it said India runs on road and the road network is the backbone of the transport system.
"During the decade ended in FY19, national highways recorded a CAGR (compound annual growth rate) of 7.25 per cent followed by rural roads (6.25 per cent) and urban roads (4.27 per cent)," it said.
The pace at which roads have been constructed has grown significantly from 12 km per day in 2014-15 to 30 km per day in 2018-19 before it moderated in 2019-20.
The decline in the construction of road per day in 2020-21 is mostly on account of the COVID-19 shock, it noted.
COVID-19 shock had resulted in decline of road construction to 22 km a day in the current fiscal from 30 km a day in 2018-19.
With the unlocking of the economy, construction of roads is expected to return to the high pace attained before COVID-19, it added.
On the civil aviation front, it said air passenger travel and aircraft movements are predicted to reach pre-COVID level in early 2021 as a result of swift and decisive interventions and effective measures put in place by the government.
Despite the severe challenges posed by the pandemic, the Indian aviation industry has persevered through the crisis and demonstrated long-term resilience and full commitment to serve, it said.
The Vande Bharat Mission launched to evacuate stranded Indians across the world has thus reported over 30 lakh passenger arrivals by December 13, 2020, with over 27 lakh facilitated through chartered flights and Air India Group, making it the largest evacuation mission in human history, it said.
About ports sector, the Survey said between July 2019 to October 2020, 37 Sagarmala projects worth Rs 8,461 crore were completed which comprise 17 projects of port modernization worth Rs 2,721 crore, 14 port connectivity projects worth Rs 5,372 crore and 6 coastal community development projects worth Rs 368 crore.
On Indian Railways, it said the government has allowed the private players to operate in the railways sector through the PPP mode under the "New India New Railway" initiative.
The initiative is expected to garner an investment of about Rs 30,000 crore from the private sector. Ministry of Railways has identified over 150 pairs of train services for the introduction of 151 modern train sets or rakes through private participation.
Talking about mining sector, it said under the Aatmanirbhar Bharat Abhiyan, the government announced major initiative which includes introduction of a seamless composite exploration-cum-mining-cum production regime and 500 mining blocks are to be offered through an open and transparent auction process besides joint auction of bauxite and coal mineral blocks.
Photograph: Rupak De Chowdhury/Reuters