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Massive infrastructure development under Modi govt, 101 major projects worth Rs. 1 lakh crore completed between April and December

Amit Agrahari by Amit Agrahari
23 April 2019
in Economy
Massive infrastructure development under Modi govt, 101 major projects worth Rs. 1 lakh crore completed between April and December

(PC: Financial Express)

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Infrastructure has been a priority for the Modi government in the last five years. It made a significant investment in public transport, highway construction, railways, and water transport and air connectivity. The large public investment in infrastructure was supported by oil bonanza, which government got in initial years due to a slump in crude prices. There has been a very low investment in roads sector by UPA government because various welfare programs like MGNREGA have constrained the government from financing infrastructure building. The last big push in road development was in NDA-I government led by former Prime Minister Atal Bihari Vajpayee. The two big infrastructure projects- Golden Quadrilateral Network and Pradhan Mantri Gram Sadak Yojna (PMGSY) were started during this time.

The second term of NDA government could be called the golden era of the Indian infrastructure project. The government completed 101 major infrastructure projects worth more than 1 lakh crore rupees between the periods of April to December. The government completed almost 50 percent of the projects with a deadline on schedule while almost the same number of projects was delayed. Completion of a project on time is very unusual, especially in India. The track record improved drastically after the Modi government came to power.   

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In the previous fiscal year (as of December 2018), the big projects reported by the ministry was 1,464 (Rs 150 crore and above). The total budgeted cost of the projects is 18,45,993.53 crore rupees while the anticipated cost is 21,66,855.51 crore rupees given the cost overruns. The performance of the Modi government on infrastructure front has been so good in the last four years that the prospect of it coming back to power has increased the private investment in the sector.

The private investors expect that there will be huge infrastructure growth if the Modi government comes to power after the 2019 general election. BJP promised 144 lakh crore rupees investment in next five years if the party comes to power. As the scope for government is limited, the money will be sourced from private players and this boosted the confidence of financers. In the March quarter, the total loan given for infra projects was 52000 crore rupees compared 14400 crores in the previous quarter. This is the highest loan to infrastructure project since 2011. The private players expect a moderate return from infrastructure projects but the money is secure given the government backing. 

The central government’s spending on infrastructure increased exponentially under the Modi government. In the first year, the government allotted only 1.81 lakh crore rupees for it and this increased to 5.97 lakh crore rupees in 2018-19. The spending increased by more than triple in the last five years with total spending 19.36 lakh crore rupees but the ambitious target set by BJP in the manifesto (144 lakh crore rupees in next five years) could not be met without private investment.   

Infrastructure has been a priority for the NDA government in the last five years. It has made a significant investment in public transport, highway construction, railways, water transport, and air connectivity. The large public investment in infrastructure was supported by oil bonanza which government got in its initial years due to the slump in crude prices. There has been a very low investment in the road construction sector by the UPA government because various welfare programmes like MGNREGA had constrained the government from financing infrastructure building.

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