Public investments in infrastructure, as a percentage of the country’s gross domestic product (GDP), have exceeded the pre-pandemic level, the Rajya Sabha was informed on Tuesday.
Infrastructure investments by the Union and state governments and Central Public Sector Enterprises touched 5.87% of GDP in 2023-24, higher than 5.03% in the previous year and 5.76% in the pre-pandemic year of 2019-20, minister of state for finance Pankaj Chaudhary said in a written reply.
In absolute terms, the investments surged to Rs 17.35 lakh crore in 2023-24, against Rs 13.57 lakh crore in the previous fiscal and Rs 11.57 lakh crore in 2019-20, he said.
The Central government, in particular, has raised its capital investments sharply in recent years, using the high-multiplier effect of such spending to nurse the Covid-hit economy back to health fast. The Centre’s annual capex hike has been in the range of 17% to 39% annually since FY22.
For the current fiscal, the Centre alone has budgeted its capital spending outlay at a record Rs 11.11 lakh crore. This includes Rs 1.5 lakh crore in long-term interest-free loans to states to bolster their capex.
“Over the years, the government has significantly increased investment in the infrastructure sector, which is expected to crowd in private investment,” Chaudhary said.
Several measures have been introduced to attract private sector participation, including supporting the public-private partnerships with viability gap funding and reforms for innovative financing tools like InvITs, REITs and IDFs, the minister said.
Similarly, to ensure long-term infrastructure financing, institutions like the National Investment and Infrastructure Fund and National Bank for Financing Infrastructure and Development have also been set up, Chaudhary added.
