Revival via Pipeline of Infrastructure

Context: The final report on National Infrastructure Pipeline (NIP) has a series of practical suggestions that need to be speedily implemented to revive the Covid-scarred economy post lockdown.

Suggestions

• Tap the global capital in both debt and equity to catch up with the envisaged investment of 111 lakh crore during 2020-25.

• Issuing corporate bonds:  to boost modern arm’s-length finance for infrastructure projects.
• Enhancing bond ratings by Credit guarantee enhancement corporation announced in budget 2019-20. (Because Infrastructural bond has rarely rating higher than BBB.)
• Securitization of loans backed by cash flow of operating projects (Because of reluctance of investors to bear construction risk)
• Value capture financing i.e. redevelopment along bypasses and urban infrastructure can all be gainfully followed through.

• Reasonable user charges should be collected efficiently for viable infrastructure funding.

Funding Under NIP

• Funding pattern: 39% share in NIP projects by centre, 40% by states, 21% by Private sector

• Status: 40% under implementation, 30% at a conceptual stage, and 20% under development.
• Sector wise Break up of Fund: Energy Sector 24%, Roads 18%, Urban Projects 17%, Railway Projects 12%