The central government of India has recently formed a task force with a particular aim: to develop a National Infrastructure Pipeline (NIP) for every fiscal year between 2019-2020 and 2024-2025. Spearheading this task force is the Secretary of the Department of Economic Affairs at the Ministry of Finance.
Understanding the Purpose of NIP
The formation of the NIP aligns with the Prime Minister’s Independence Day address, where he announced an investment of Rs.100 lakh crore ($1.4 trillion) in infrastructure development over the course of the next half a decade. The purpose of the NIP is to ensure infrastructure projects are well-prepared and effectively implemented.
Scope of Infrastructure Projects
The infrastructure projects under the purview of the NIP can be social or economic, including both greenfield and brownfield projects. To qualify, these projects need to have a cost exceeding Rs 100 crore. Monitoring of these projects for timely and cost-effective implementation will fall under the responsibility of individual ministries and departments.
Economic Impact of Infrastructure Investment
By investing heavily in infrastructure, the government aims to boost annual infrastructure investments, with a target of achieving a Gross Domestic Product (GDP) of $5 trillion by 2024-2025. In the previous decade (2008-17), India invested approximately $1.1 trillion on infrastructure.
Role of the Task Force
The task force’s function includes identifying technically feasible and economically viable infrastructure projects for initiation in the FY2019-20. This team will also list the projects that could be included in the pipeline for each of the remaining five years from FY2021-25. Another key role of this task force will be to estimate annual infrastructure investment or capital costs, guide ministries in identifying appropriate financing sources, and recommend ways to monitor the projects to minimize cost and time overruns.
Table of Essential Facts
| Fact | Details |
|---|---|
| Task Force Chair | Secretary, Department of Economic Affairs, Ministry of Finance |
| Investment Amount | $1.4 trillion |
| Project Cost Threshold | Above Rs 100 crore |
| Previous Infrastructure Investment (2008-17) | $1.1 trillion |
| GDP Target (2024-25) | $5 trillion |
Private Investment through IIG and NIIF
The task force will also enable the robust marketing of a pipeline of projects requiring private investment through the India Investment Grid (IIG) and National Investment & Infrastructure Fund (NIIF).
About India Investment Grid (IIG)
The IIG is an initiative by the Department for Promotion of Industry & Internal Trade (DPIIT), Ministry of Commerce and Invest India, that serves as a national investment promotion and facilitation agency. It provides a single online interactive platform showcasing various investment options across India while connecting potential investors to project promoters.
Significance of National Investment & Infrastructure Fund (NIIF)
The NIIF, which is backed by the Indian government, was established to provide long-term capital to the country’s infrastructure sector. Holding 49% stake in NIIF, the government encourages both foreign and domestic investors to hold the remaining stake. Due to the Centre’s significant stake, NIIF is considered India’s quasi-sovereign wealth fund, and across its three funds- Master Fund, Fund of Funds, and Strategic Fund – it manages over $3 billion of capital. The registered office of NIIF is in New Delhi.
