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Economic Survey | Infrastructure quintessential to boost development; sectors to grow with unlocking of economy

On the Civil Aviation entrance, it mentioned air passenger journey and plane actions are predicted to attain pre-COVID stage in early 2021 because of this of swift and decisive interventions and efficient measures put in place by the federal government.

Terming funding in infrastructure “quintessential” to boost development, the Economic Survey on Friday mentioned put up unlocking of the economy, infra sectors are poised for development and development of roads is anticipated to return to the excessive tempo attained earlier than COVID-19.

The infrastructure sector would be the key to total financial development and macroeconomic stability, the Survey mentioned emphasising that the yr after the disaster (2021-22) would require sustained and calibrated measures to facilitate the method of financial restoration and allow the economy to get again on its long-term development trajectory.

“Basic infrastructure facilities in the country provide the foundation of growth. In the absence of adequate infrastructure, the economy operates at a suboptimal level and remains distant from its potential and frontier growth trajectory.

“The robust backward-forward linkages of the infrastructure sector are nicely established. Therefore, funding in infrastructure is quintessential for extra fast and inclusive financial development,” the Economic Survey tabled in Parliament said.

Economic Survey 2021 updates

Asserting that ₹111 lakh crore National Infrastructure Pipeline for 2020-2025 will be a game-changer for the Indian economy, the Survey said sectors like energy, roads, urban infrastructure, railways have a lion’s share in it that will help boost growth.

To boost private investment in infra sector, it said the government has set up the Public Private Partnership Appraisal Committee (PPPAC) for appraisal of PPP projects.

In 2020-21, PPPAC recommended 7 projects with total project cost of ₹66,600.59 crore. Out of these 7 projects, 1 is a telecom sector project, 3 are railway sector projects, 2 are MHA sector projects and 1 is port sector project, it said.

To boost the sector, in the current fiscal year, the government approved the continuation of the revamped Infrastructure Viability Gap Funding (VGF) scheme till 2024-25. Revamping of the proposed VGF scheme will attract more PPP projects and facilitate the private investment in social sectors (Health, Education, Waste Water, Solid Waste Management, Water Supply etc.), it said.

About highways, it said India runs on road and the road network is the backbone of the transport system.

“During the last decade led to FY19, nationwide highways recorded a CAGR (compound annual development fee) of 7.25 per cent adopted by rural roads (6.25 per cent) and concrete roads (4.27 per cent),” it said.

The pace at which roads have been constructed has grown significantly from 12 km per day in 2014-15 to 30 km per day in 2018-19 before it moderated in 2019-20. The decline in the construction of road per day in 2020-21 is mostly on account of the COVID-19 shock, it noted.

COVID-19 shock had resulted in decline of road construction to 22 km a day in the current fiscal from 30 km a day in 2018-19.

With the unlocking of the economy, construction of roads is expected to return to the high pace attained before COVID-19, it added.

Air traffic

On the Civil Aviation front, it said air passenger travel and aircraft movements are predicted to reach pre-COVID level in early 2021 as a result of swift and decisive interventions and effective measures put in place by the government.

Despite the severe challenges posed by the pandemic, the Indian aviation industry has persevered through the crisis and demonstrated long-term resilience and full commitment to serve, it said.

The Vande Bharat Mission launched to evacuate stranded Indians across the world has thus reported over 30 lakh passenger arrivals by December 13, 2020, with over 27 lakh facilitated through chartered flights and Air India Group, making it the largest evacuation mission in human history, it said.

Ports

About ports sector, the Survey said between July 2019 to October 2020, 37 Sagarmala projects worth Rs 8,461 crore were completed which comprise 17 projects of port modernization worth ₹ 2,721 crore, 14 port connectivity projects worth ₹5,372 crore and 6 coastal community development projects worth ₹ 368 crore.

Railways

On Indian Railways, it said the government has allowed the private players to operate in the railways sector through the PPP mode under the “New India New Railway” initiative.

The initiative is anticipated to garner an funding of about ₹30,000 crore from the non-public sector. Ministry of Railways has recognized over 150 pairs of practice providers for the introduction of 151 trendy practice units or rakes by way of non-public participation.

Talking about mining sector, it mentioned below the Aatmanirbhar Bharat Abhiyan, the federal government introduced main initiative which incorporates introduction of a seamless composite exploration-cum-mining-cum manufacturing regime and 500 mining blocks are to be supplied by way of an open and clear public sale course of in addition to joint public sale of bauxite and coal mineral blocks.

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