Infrastructure is on the cards: are the announcements made by FM Sitharaman enough encouraging as its number?

nirmala sitharaman
Image credit: Telangana Today

In the last feature, we came across the attempts which were made from the government's side to pull out our country from the current economic riddle which has hit us so hard that the figures have slipped down to their lowest in comparison to last several years.

Although the attempts are been made to know the opinions of several economists, experts and businessmen to which we call pre-budget meetings, we the public have to patiently perform our job as a separator.

But weeks before the budget would hit the desks of the parliament, finance minister Nirmala Sitharaman took the call and made a press release and now we know the focal point of the budget.

Image credit: Market Business News

In the last blog, we discussed how several infra projects in various sectors can be a lifeline and provide aid to our country's economy, let's see what's in the nutshell.

So coming straight to the point, in the next five years the govt is planning to make a huge pool of ₹ 102 lakh crore to invest in infrastructure!

A full plan of investment in terms of sectors was put on the table and the number was enough to enlighten picturise a new dream post the $5 trillion GDP goal.

It's one of their jobs to make us focused and work hard to perish a collective goal of our country but we should, in fact, must know that "how's  the condition on the ground?", "Are those goals overambitious?", etc.

So making that press release in focus, let's discuss one by one what were the announcements of investments in several sectors.

  • Road - Rail infrastructure: One of the most critical aspects of development to get an investment of  ₹19.63 lakh crores for roads and ₹13.68 lakh crores for railways.
  • Urban India would see the investment of ₹16.29 lakh crores in urban infrastructure while Rural India ₹7.72 lakh crores would be invested.
  • Likewise, ₹1.43 lakh crores will be invested in airports and similarly ₹1.43  lakh crores in ports for infrastructure.
  • The industrial sector which contributes a big number to the GDP will get ₹1.07 lakh crore investment in industrial infrastructure development.
  • And now for the main contributors at labour and economic aspects, the farmers, investment of ₹7.7 lakh crores is planned for irrigation projects and for agriculture & food processing sector ₹0.6 lakh crores will be invested.
  • For Social infrastructure investment of ₹3.56 lakh crores will be allocated.
  • Talking about Power, ₹11.7 lakh crores will be invested in this sector of the total ₹24.54 lakh crores of the overall energy sector investment.
  • And in the dawn of 5G, the telecommunication sector will witness an investment of ₹3.2 lakh crores is being proposed.

Image credit: Twitter

And this time for the investment the government is taking the public-private partnership strategy more seriously by allowing the private sector to invest as much as 22% of the total investment and aims to raise the number in next 5 years.

The rest will be divided equally between central and state governments, 39% for each.

So, in short, the figures are in front and the goal is set and India is gonna experience an infra revolution in the coming years.

Let's come on the ground, and think about how the figures would be actually come up from the pockets of state governments?

Not every state can afford that 39% share in such a harsh environment where many are in conflict with the GST share with the centre and also the national recession is affecting them in many ways.

So it will be a very difficult task for the Modi government to bring all the states on board and have the same acceptance for this plan. And most importantly as per the political aspects are concerned the path is gonna be way harsher.

And now talking about the 22% allocated to the private sector for investment. Basically in the current scenario where the corporate and manufacturing sectors are hit hard by the economic crisis, it would be difficult for them to draw the money out from the market and invest in the infrastructure development.

economic crisis
Image credit: The Motley Fool

And yet the detailed execution plan is not revealed, they seem to be just in the surface there is yet a big question that how such a huge pool of money will be made onboard.

Apart from these infra plans, some short term goals should also be framed to face the current situation which is deteriorating as well as the loop of demand and production also need to be tackled.

So the execution is different and difficult from just announcements and plans. 

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