In order to boost infrastructure investment in the country put India on the track of becoming a $5 trillion economy, the government has set up a high-level task force to identify infrastructure projects where the government will invest Rs. 100 lakh crore by 2024-25.
- The task-force is headed by Economic Affairs Secretary.
- It will draw a ‘national infrastructure pipeline’ of Rs. 100 lakh crore involving both Greenfield and Brownfield infra projects costing Rs. 100 crore and above.
- The other members of the task force include secretaries of various ministries, NITI Aayog CEO and senior officials.
- The task force will identify infra projects that are financially viable and technically feasible to initiate in 2019-20.
- It is further tasked to identify projects for FY 21 and FY25.
- The projects pipeline for 2019-20 will be submitted to the Finance Ministry by October 31, 2019.
$5 Trillion Economy
- In order to achieve PM’s target of making India a $5 trillion economy, the government has to spend Rs. 100 lakh crore or $1.4 trillion in the next five years.
- From 2008-17, India had spent $1.1 trillion in infrastructure.
- The target of spending $1.4 trillion is a big challenge for the government.
Can Infra Spending Alone Achieve 5T mark?
- India’s Gross Value Addition (GVA) at current prices is $2.5 Trillion.
- By taking RBI’s figure of 7.4% as the base figure for GDP growth, India will achieve 5T mark in 2027. The target can be achieved in 2025 if the country can grow at 9% per year.
- Apart from spending on infrastructure, the government can take a slew of initiatives.
- India must take advantage of the trade war between the US and China and boost its manufacturing sector. There are four product groups which the government should promote.
1. machinery that makes the products
2. specialty materials, biologics, nanotechnology, integrated circuits, embedded systems, medical imaging devices
3. computers, TVs, mobile phones, and telecom equipment
4. auto components, toys, furniture, footwear, and apparels
- The government should provide sector-specific schemes to promote manufacturing and excess labour will be absorbed by the manufacturing sector.
- Next, the government should find ways to increase agricultural productivity. One way the government can do this is by identifying 1000 Agriculture Development Regions (ADRs) with each ADR comprising 200 sq.km area. State governments must be encouraged to take these ADRs on a lease for 10 years or invite corporate farming ventures (CFVs) to work for 10 years. While CFVs work on the farm, the farmers will remain the landowners. The governments will assess the 10-year income of the farmer and will pay in double every year.
- In the services sector, the government has to focus on the travel and tourism sector and healthcare sectors to boost services performance. Also, the construction sector has a huge potential in generating income.