Union Budget 2025 | Accelerate private investment to achieve goal of 'Viksit Bharat@2047': Economic Survey

New Delhi: To meet the goal of 'Viksit Bharat@2047', private investment needs to be accelerated in many critical sectors as government funding alone cannot upgrade the required infrastructure, the Economic Survey 2024-25 has stated.

The document tabled in Parliament on Friday stated that it is also clear public capital alone cannot meet the demands of upgrading the country’s infrastructure commensurate with the requirements of Viksit Bharat@2047.

“We need to ensure increasing private participation in infrastructure by improving their capacity to conceptualise projects and their confidence in risk and revenue-sharing mechanisms, contract management, conflict resolution and project closure.

“The efforts of the Union Government would need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country. Equally important, the private sector must reciprocate, too,” the Survey, tabled by Finance Minister Nirmala Sitharaman, said.

Private participation should accelerate in many critical infrastructure sectors in many ways—programme and project planning, financing, construction, maintenance, monetisation and impact assessment, it suggested.

The document stated that India needs a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth.

"To realise its economic aspirations of becoming Viksit Bharat by the time of the centenary of independence, India needs to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two,” the Survey said.

Requirements are aplenty. Accelerating our efforts to build integrated multi-modal transport, coupled with the modernisation of existing physical assets, will improve efficiency and last-mile connectivity, it suggested.

Disaster resilient urbanisation, public transport, preservation and upkeep of heritage sites, monuments and tourist destinations, as well as rural public infrastructure, including connectivity, call for greater attention.

Our Net Zero commitments entail added stress on creating renewable energy capacities, it pointed out.

It noted that there are binding budget constraints to the different tiers of government.

Private participation should accelerate in many critical infrastructure sectors in many ways—programme and project planning, financing, construction, maintenance, monetisation and impact assessment, it suggested.

"Our infrastructure programme supports a variety of PPP models like build operate-transfer (toll and annuity), design-build-finance-operate-transfer, hybrid annuity model and toll-operate-transfer," it stated.

The strategy to step up private participation needs coordinated action of all stakeholders involved - governments at different tiers, financial market players, project management experts and planners, and the private sector.

Capacities to conceptualise projects, develop sector-specific innovative strategies for execution, and develop high-expertise areas such as risk and revenue sharing, contract management, conflict resolution and project closure need to improve substantially, it suggested.

The efforts of the Union Government would need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country, it stated.

Apart from asset creation, our infrastructure programme also emphasises the use of sustainable materials and processes.

These considerations are receiving particular attention in areas such as highway development, waterway projects, power capacity addition and waste management.

Given the global imperative of promoting sustainable practices, model practices in this direction need to be replicated widely, it suggested.

The progress of physical indicators (in infrastructure sectors) in the current year mirrors the financial progress, it noted.

The addition to the rolling stock of railways, port handling capacity and power and transformation capacity improved during FY25 so far on a Y-o-Y basis.

The addition to the length of highways, roads and railway lines has been modestly lower, it noted.

On the whole, seen against the background of the constraints that prevailed in Q1FY25, infrastructure build-up in the current year has stayed on course, it held.

The government has placed infrastructure development at the centre stage of its fiscal and public policy agenda, it also noted.

The survey stated that an RBI’s report on private investments showed that investment intentions increased to Rs 2.45 lakh crore for FY25 as compared to Rs 1.6 lakh crore for FY24. Along with fresh investment, some of the existing intentions would spill over and be implemented in FY26, the report said.

Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.