The Narendra Modi government is likely to invest nearly £300 billion in transport sector in the next five years, which is nearly a third of the £1,000 billion investment push for the infrastructure sector to elevate economic growth and job creation. According to the details of future investment that the BJP had prepared at the time of releasing the election manifesto, the largest chunk is proposed to be invested in railways, river-linking and highway expansion programme,. In addition, defense modernisation, which requires £90 billion, is also a part of the plan.
While investment of £300 billion has been estimated for building new corridors for bullet trains and dedicated freight movement, around £300 billion is proposed to be allocated for the port sector over the next five years, with a large chunk earmarked for the Sagarmala project. Besides railways, roads, ports and airports, the allocation also envisages to focus on social infrastructure - education & health - and the farm sector, where investment is seen to be lagging.
Sources said depending on the pace of work undertaken or new requirements that may arise during implementation, the sectoral allocation can be modified. Apart from budgetary allocation, support through viability gap funding and investment by public sector companies is also included in the capex estimates. Since 2013-14, capital expenditure has increased by 113% to £96 billion and it is proposed to rise with faster GDP growth over the next five years. This is expected to result in more rapid job creation as labour costs are estimated to be around £100 billion.
With PM Narendra Modi keen to revive the plan for inter-linking of rivers, the BJP blueprint has suggested that 37 rivers would be taken up to transfer water from surplus to deficit areas. While implementing this plan is expected to cost around £110 billion, nearly £70 billion may have to be allocated for the next five years. Investment of another £70 billion has been worked out for upgrading other urban infrastructure. Sources said according to the blueprint prepared by the party, £50 billion would be spent for urban housing scheme to provide financial assistance for approximately 20 million houses.
Considering that India is rapidly urbanising, a huge thrust on urban infrastructure gains importance. There is significant growth in migration from rural areas to cities and towns, triggering the need to augment the existing infrastructure.