The Economic Survey tabled in Parliament on Friday underlined the importance of private participation in the infrastructure sector to realise Viksit Bharat@2047.

India needs a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth, according to the Economic Survey 2024-25 tabled in the Parliament on Friday by Union Finance Minister Nirmala Sitharaman.

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The survey states that building infrastructure – physical, digital and social – has been a central focus area for the government in the last five years. This has had various dimensions – increase in public spending on infrastructure, creation of institutions to de-bottleneck approvals and execution and innovative modes of resource mobilization, it said.

“Public capital alone cannot meet the demands of upgrading the country’s infrastructure commensurate with the requirements of Viksit Bharat@2047. We need to ensure increasing private participation in infrastructure by improving their capacity to conceptualize projects and their confidence in risk and revenue-sharing mechanisms, contract management, conflict resolution and project closure,” it said.

The efforts of the Union government would need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country, states the survey. Equally important, the private sector must reciprocate too, it added.

“The strategy to step up private participation needs coordinated action of all stakeholders involved – governments at different tiers, financial market players, project management experts and planners, and the private sector. Capacities to conceptualise projects, develop sector-specific innovative strategies for execution and develop high-expertise areas such as risk and revenue sharing, contract management, conflict resolution and project closure need to improve substantially,” the survey said.

“The pace of the Union government’s capital expenditure in major infrastructure sectors was affected during Q1FY25, largely due to the model code of conduct during the general elections. The unusual patterns of the last monsoon season also slowed down the progress of work. Hence, a year-over-year comparison may not be appropriate for Q1FY25. As the electoral process settled, capital expenditure saw an uptick in July November 2024,” it said.

The survey states CapEx in infrastructure sectors is expected to gain further momentum in the remaining months of the current fiscal.

“On an average, ministries related to infrastructure sectors utilised 60 per cent of the budgeted capex during April to November 2024. This compares favourably with the progress achieved in the same period in FY20 when the 17th Lok Sabha elections were held,” it said.

“The government has instituted many de-bottlenecking and facilitatory mechanisms like the National Infrastructure Pipeline, National Monetisation Pipeline and PM-Gati Sakti that have made progress,” it noted.

Financial market regulators have introduced reforms to encourage private participation. Yet, the uptake of private enterprise is limited in many core sectors, points out the survey.

“The Union Government‘s capital expenditure on key infrastructure sectors has grown at a rate of 38.8 per cent from 2019-20 to 2023-24. In 2024-25, Capital expenditure picked up momentum between July and November 2024,” it said.

The power sector network continues to expand, with installed capacity rising by 7.2 per cent year-on-year to 456.7 GW as of November 2024, points out the survey.

“The addition of transformation capacity also gained momentum this year. In the shift towards renewable energy, the power sector has been bolstered primarily by large-scale solar and wind initiatives. By the end of December 2024, the country’s total renewable energy installed capacity increased by 15.8 per cent year-on-year (YoY), reaching 209.4 GW, up from 180.8 GW in December 2023,” it said.

“With the implementation of the Revamped Distribution Sector Scheme, the daily average power supply has improved from 22.1 hours in FY14 to 23.4 hours in FY24 in the urban areas and from 12.5 hours in FY14 to 21.9 hours in the rural areas. The gap between energy demand and supply has also declined from 4.2 per cent in FY14 to a mere 0.1 per cent by December 2024,” it said.