Moreover, the country will see close to Rs 3,000 crore in investment daily in infrastructure sector alone, according to CRISIL's Infrastructure Yearbook 2017
There is need to step up investment in infrastructure by at least Rs 50 lakh crore between fiscals 2018 and 2022, according to rating company Crisil.
Moreover, the country will see close to Rs 3,000 crore in investment daily in infrastructure sector alone, according to CRISIL's Infrastructure Yearbook 2017.
As per the report, infrastructure investment in India is estimated to have risen to Rs 37 lakh crore, or 5.6% of GDP, between fiscals 2013 and 2017, a 56% growth over the Rs 24 lakh crore spent in the five years preceding.
The projection to increase spending on infrastructure to Rs 50 lakh crore is likely to help in increasing private sector investments from fiscal 2019. "We see the power, transport and urban sectors accounting for 78% of the overall infrastructure spending," the report said.
The sectors covered in the report include power, railways, aviation, roads & highways, ports & shipping and urban.
During fiscals 2016 and 2017, increased spending by the central government partially offset a steep decline in private investments.
"Recent initiatives reaffirm the central government's strong commitment to infrastructure with public spending rising sharply in fiscals 2016 and 2017. Policy actions to revive stalled projects, expedite approvals, introduce the hybrid annuity and toll-operate-transfer models in highways, sustain the rapid growth in renewable capacity – all augur well. The ambitious Saubhagya scheme follows the work in progress under UDAY to universalise household access to electricity," Sameer Bhatia, president, Crisil Infrastructure Advisory, said in the Infrastructure Yearbook 2017.
According to him, a number of challenges remain that need decisive tackling, some of which includes speedy redressal of stressed assets and debt overhang, a comprehensive re-tooling of the public-private partnership framework. Work is also needed to fix power distribution utilities and municipalities that curb scale-up of investments.
Power transmission sector is the most attractive investment option, followed by roads & highways and renewable energy, it said. The reason for power transmission being the most attractive is a creation of green energy corridor by fiscal 2022, wherein around $3.5 billion of investment would happen.
"Thermal generation, power distribution and railways need a lot of facilitation before they can draw big money. The urban sector, which is the least attractive right now, also needs a lot of attention," said Bhatia in a statement.
The report highlights areas of concerns in power sector due to non-availability of coal and lack of power purchase agreements as there are 51 gigawatt of stressed assets in thermal and gas segment. Another 23 gw of power projects are in different construction stages. These factors may lead to the creation of non-performing assets of up to Rs 4 lakh crore for the banks which have advanced loans.
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