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 guaranteeenhancement 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%