National Infrastructure Pipeline – A Key Part of Building a $5 Trillion Economy

The National Infrastructure Pipeline (NIP) aims at investing over Rs 100 lakh crore into several infrastructure projects between 2019 and 2025. The aim of this pipeline is to ensure that India remains on track towards the target of achieving $5 trillion GDP by 2024-25. The NIP identifies the areas of infrastructure spending and development, and also enumerates in detail the way in which public-private partnership model can be effectively implemented, both in terms of financing as well as delivery. The NIP also emphasizes on Ease of Living, as it recognizes that quality social infrastructure services lead to greater economic empowerment of the Indian population.

Boost to Economy and Employment

India’s rapid urbanisation means that there will be greater demand for housing, water supply, sanitation services and transportation facilities. Plugging the deficiency in infrastructure will smoothen the process of urbanisation by promoting ease of living and facilitating economic activity. After all, quality of life is essential for the citizens of India and its workforce, since it directly leads to improved productivity and spins off into greater demands for services, thus also creating demand within the economy. It will thus help in realizing the full potential of growing urban economy and raise its contribution to India’s GDP in the direction of the $5trillion target for 2025.

Further, with increasing population, an increasing workforce will naturally arise. The NIP observes that it is estimated that India’s total workforce will reach 0.64 billion by 2030, out of which 0.38 billion will be employed in the rural areas and 0.26 billion will be employed in the urban areas. It also says that the contribution of urban areas in total employment will increase at a higher rate than the contribution of rural areas during the period 2018-30.

The NIP can help address employment needs in multiple ways – by providing jobs in infrastructure sector, both on development and post-development management and service side; by enabling entrepreneurship dependent on improved infrastructure facilities; boosting incomes across sectors such as agriculture; providing quality affordable services; and creating jobs in social welfare areas of healthcare and education. These gainful forms of employment and entrepreneurship are essential, given the acknowledgement that India is transitioning swiftly into a service-oriented economy by 2030.

Resilient Infrastructure Creates Resilient India

Moreover, it is important to ensure resilient infrastructure, since a significant part of all public sector losses due to weather and climate related extreme events are related to infrastructure damage. However, other natural phenomena such as earthquakes too cause massive infrastructure damage. A clear need to ensure in-built resilience in new and existing infrastructure systems is therefore the need of the hour. This will help to cut down economic losses and also help to keep the targets of infrastructure development on track. Further, resilient infrastructure will also enable faster relief and rescue effort deployment in times of disaster, helping deliver a quicker response and reducing loss of human lives.

Commitment to infrastructure development under the NIP also sends out positive signals to the international market. It demonstrates to the world at large India’s commitment to economic and governance reforms that improve the operating economic environment for companies and developers and make it more business-friendly. This in turn will attract more foreign investment into India and also prove instrumental in pulling in global conglomerates to come and do business in India. This has far reaching ramifications, as it helps create new jobs, raise income and prosperity levels and help raise the GDP levels significantly.

The NIP essentially lays down the Government’s vision on infrastructure in India, which aims towards the following goals:

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