February 2024 / India

The Finance Act, 2024 (the Act) received the Indian President's assent on 15 February 2024 with no change in tax rates under income tax and goods and services tax (GST).

Other direct and indirect tax proposals enacted are set out below.

Income Tax

The Act extends the sunset clause for tax deduction under section 80-IAC of the Income Tax Act, 1961 for start-ups incorporated up to and including 31 March 2025 (currently, 31 March 2024).

Furthermore, the Act extends the deadline for claiming tax exemption/deduction up to and including 31 March 2025 (currently, 31 March 2024) for the purpose of:

• the commencement of operations of specific International Financial Services Centre (IFSC) units, including investment divisions of an offshore banking unit, as well as other units earning income from leasing or transfer of aircrafts and ships; and
• making of investments by specified persons such as sovereign wealth funds or foreign pension funds.

Goods and Services Tax

The Act amends the definition of "input service distributor" (ISD) and the manner of distribution of input tax credit by an ISD.

The full text of the Finance Act, 2024 is available here.

India's Interim Budget 2024, presented by Hon’ble Finance Minister Smt Nirmala Sitharaman, lays out the government's spending plans for the first half of the upcoming fiscal year. This summary delves into the key highlights across various sectors, offering insights for both the public and investors.

Welfare

• With the pursuit of ‘Sabka Saath’ in these 10 years, the Government has assisted 25 Cr people to get freedom from multi-dimensional poverty.
• ‘Direct Benefit Transfer’ of 34 Lakh Cr from the Government using PM-Jan Dhan accounts has led to savings of 2.7 Lakh Cr for the Government.
• PM-SVANidhi has provided credit assistance to 78 Lakh street vendors. From that total, 2.3 Lakh have received credit for the third time.
• PM-JANMAN Yojana reaches out to the particularly vulnerable tribal groups, who have remained outside the realm of development so far.
• PM-Vishwakarma Yojana provides end-to-end support to artisans and craftspeople engaged in 18 trades.
• Every year, under PM-KISAN SAMMAN Yojana, direct financial assistance is provided to 11.8 Cr farmers, including marginal and small farmers. Crop insurance is given to 4 Cr farmers under PM Fasal Bima Yojana.
• Electronic National Agriculture Market has integrated 1361 mandis, and is providing services to 1.8 Cr farmers with a trading volume of INR 3 Lakh Cr.

Empowering Youth

• The National Education Policy 2020 is ushering in transformational reforms. PM Schools for Rising India (PM SHRI) are delivering quality teaching, and nurturing holistic and well-rounded individuals.
• The Skill India Mission has trained 1.4 Cr youth, upskilled and reskilled 54 Lakh youth, and established 3000 new ITIs.
• A large number of new institutions of higher learning, namely 7 IITs, 16 IIITs, 7 IIMs, 15 AIIMS and 390 universities have been set up.
• PM Mudra Yojana has sanctioned 43 Cr loans aggregating to 22.5 Lakh Cr for the entrepreneurial aspirations of our youth. Besides that, Fund of Funds, Start-Up India, and Start-Up Credit Guarantee schemes are assisting our youth.

Women Empowerment

• Thirty Cr Mudra Yojana loans have been given to women entrepreneurs. Female enrolment in higher education has gone up by twenty-eight per cent in ten years. In STEM courses, girls and women constitute forty-three per cent of enrolment - one of the highest in the world.

Geopolitics

• The recently announced India-Middle East-Europe Economic Corridor is a strategic and economic game changer for India and others.

Vision for Viksit Bharat

• Our vision for ‘Viksit Bharat’ is that of “Prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential”.
• In the full budget in July, Government will present a detailed roadmap for our pursuit of ‘Viksit Bharat’.

Strategy for ‘Amrit Kaal’

• Government will adopt economic policies that foster and sustain growth, facilitate inclusive and sustainable development, improve productivity, create opportunities for all, help them enhance their capabilities, and contribute to the generation of resources to power investments and fulfil aspirations.
• Guided by the principle ‘Reform, Perform, and Transform’, the Government will take up next generation reforms, and build consensus with the states and stakeholders for effective implementation.
• Government to ensure timely and adequate finances, relevant technologies and appropriate training for the MSMEs to grow and also compete globally. Orienting the regulatory environment to facilitate their growth will be an important element of this policy mix.
• Government will facilitate sustaining high and more resource-efficient economic growth. This will work towards energy security in terms of availability, accessibility and affordability.
• For meeting the investment needs our Government will prepare the financial sector in terms of size, capacity, skills and regulatory framework.

Aspirational Districts Programme

• Government stands ready to assist the states in the faster development of aspirational districts and blocks, including the generation of ample economic opportunities.

Development of the East

• Government will pay utmost attention to making the eastern region and its people a powerful driver of India’s growth.

PM Awas Yojana (Grameen)

• India is close to achieving the target of three crore houses. Two crore more houses will be taken up in the next five years to meet the requirement arising from an increase in the number of families.

Rooftop Solarization and Muft Bijli

• Through rooftop solarization, one crore households will be enabled to obtain up to 300 units of free electricity every month. The following benefits are expected:
  • ​​​​​Savings of up to fifteen to eighteen thousand rupees annually for households from free solar electricity and selling the surplus to the distribution companies
  • Charging of electric vehicles
  • Entrepreneurship opportunities for a large number of vendors for supply and installation
  • Employment opportunities for the youth with technical skills in manufacturing, installation and maintenance

Housing for Middle Class

• Government will launch a scheme to help deserving sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to buy or build their own houses.

Health

• Government plans to set up more medical colleges by utilizing the existing hospital infrastructure under various departments. A committee for this purpose will be set up to examine the issues and make relevant recommendations.
• Government will encourage vaccination for girls in the age group of 9 to 14 years for the prevention of cervical cancer.
• Various schemes for maternal and child care will be brought under one comprehensive programme for synergy in implementation. Upgradation of anganwadi centres under “Saksham Anganwadi and Poshan 2.0” will be expedited for improved nutrition delivery, early childhood care and development.
• The newly designed U-WIN platform for managing immunization and intensified efforts of Mission Indradhanush will be rolled out expeditiously throughout the country.
• Healthcare cover under Ayushman Bharat scheme will be extended to all ASHA workers, Anganwadi Workers and Helpers.

Agriculture and Food Processing

• The efforts for value addition in agricultural sector and boosting farmers’ income will be stepped up.
• Pradhan Mantri Kisan Sampada Yojana has benefitted 38 Lakh farmers and generated 10 Lakh employment.
• Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 Lakh SHGs and sixty thousand individuals with credit linkages.
• Other schemes are complementing the efforts for reducing postharvest losses and improving productivity and incomes.
• For ensuring faster growth of the sector, Government will further promote private and public investment in post-harvest activities including aggregation, modern storage, efficient supply chains, primary and secondary processing and marketing and branding.
• Application of Nano DAP on various crops will be expanded in all agro-climatic zones.
• A strategy will be formulated to achieve ‘Atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower. This will cover research for high-yielding varieties, widespread adoption of modern farming techniques, market linkages, procurement, value addition, and crop insurance.
• A comprehensive programme for supporting dairy farmers will be formulated. Efforts are already on to control foot and mouth disease. India is the world’s largest milk producer but with low productivity of milch animals. The programme will be built on the success of existing schemes such Rashtriya Gokul Mission, National Livestock Mission, and Infrastructure Development Funds for dairy processing and animal husbandry.
• Implementation of Pradhan Mantri Matsya Sampada Yojana (PMMSY) will be stepped up to:
  • Enhance aquaculture productivity from existing 3 to 5 Tonnes per hectare
  • Double exports to INR 1 Lakh Cr and
  • Generate 55 Lakh employment opportunities in the near future
• Five integrated aquaparks will be set up

SHGs

• Eighty-three Lakh SHGs with nine crore women are transforming the rural socio-economic landscape with empowerment and self-reliance. Their success has assisted nearly one crore women to become Lakhpati Didi already. They are an inspiration to others. Their achievements will be recognized through honouring them. Buoyed by the success, it has been decided to enhance the target for Lakhpati Didi from 2 Cr to 3 Cr.

Research and Innovation

• A corpus of INR 1 Lakh Cr will be established with a fifty-year interest-free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains.
• A new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘Atmanirbharta’.

Infrastructure

• The outlay for the next year is being increased by 11.1% to eleven lakh, eleven thousand, one hundred and eleven crore rupees (INR 11,11,111 Cr). This would be 3.4% of the GDP.

Railways

• Three major economic railway corridor programmes will be implemented. These are:
  • Energy, mineral and cement corridors
  • Port connectivity corridors
  • High-traffic density corridors
• The projects have been identified under the PM Gati Shakti for enabling multi-modal connectivity. They will improve logistics efficiency and reduce costs.
• Together with dedicated freight corridors, these three economic corridor programmes will accelerate our GDP growth and reduce logistic costs.
• Forty thousand normal rail bogies will be converted to the Vande Bharat standards to enhance the safety, convenience and comfort of passengers.
• Metro Rail and NaMo Bharat can be the catalyst for the required urban transformation. Expansion of these systems will be supported in large cities focusing on transit-oriented development.

Aviation

• Number of airports has doubled to 149. The rollout of air connectivity to tier-two and tier-three cities under the UDAN 19 scheme has been widespread. Five hundred and seventeen new routes are carrying 1.3 Cr passengers.
• Indian carriers have proactively placed orders for over 1000 new aircrafts.
• Expansion of existing airports and development of new airports will continue expeditiously.

Green Energy

• Towards meeting our commitment for ‘net-zero’ by 2070, the following measures will be taken.
  • Viability gap funding will be provided for harnessing offshore wind energy potential for an initial capacity of one giga-watt.
  • Coal gasification and liquefaction capacity of 100 MT will be set up by 2030. This will also help in reducing imports of natural gas, methanol, and ammonia.
  • Phased mandatory blending of Compressed Biogas (CBG) in Compressed Natural Gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated.
  • Financial assistance will be provided for the procurement of biomass aggregation machinery to support collection.

Electric Vehicle

• Government will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure.
• Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanisms.

Bio-manufacturing and Bio-foundry

• A new scheme of bio-manufacturing and bio-foundry will be launched. This will provide environment friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs. This scheme will also help in transforming today’s consumptive manufacturing paradigm to one based on regenerative principles.

Blue Economy 2.0

• For promoting climate resilient activities for Blue Economy 2.0, a scheme for restoration and adaptation measures, and coastal aquaculture and mariculture with an integrated and multi-sectoral approach will be launched.

Tourism

• States will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them at a global scale.
• A framework for rating of the centres based on the quality of facilities and services will be established.
• Long-term interest free loans will be provided to States for financing such development on a matching basis.
• To address the emerging fervour for domestic tourism, projects for port connectivity, tourism infrastructure, and amenities will be taken up on our islands, including Lakshadweep. This will help in generating employment also.

Promoting Investments

• The FDI inflow during 2014-23 was $596 Bn marking a golden era. That is twice the inflow during 2005-14.
• For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘First Develop India’.

Reforms in the States for ‘Viksit Bharat’

• A provision of INR 75,000 Cr as a fifty-year interest free loan is proposed this year to support those milestone-linked reforms by the State Governments.

Societal Changes

• The Government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and demographic changes.

Launched in 2015, the Digital India program has become a transformative force, altering the pace of India’s growth story while transforming the country into a digitally empowered society and a knowledge-based economy. This vision is being realised through three key pillars: robust digital infrastructure, accessible government services, and empowered citizens.

The foundation of India’s digital transformation lies in building a ubiquitous digital infrastructure to ensure ease of living. The Digital India initiative has been instrumental in achieving this goal, and it has been extended with a total budget of ~INR 14,903 Cr from 2021-22 to 2025-26.

New Digital Services: An era of accessible governance 

Governance has undergone a major revamp, transitioning from cumbersome analogue processes to seamless online platforms. The National e-Governance Division (NeGD) has been playing a pivotal role in this, supporting the Ministry of Electronics and Information Technology (MeitY) in areas such as programme management, project development, technology management, capacity building, awareness and communications-related activities under the flagship Digital India Programme. NeGD has developed and is managing several National Public Digital Platforms such as DigiLocker, UMANG, Rapid Assessment System, OpenForge, API Setu, Poshan Tracker, National AI Portal, MyScheme, India Stack Global and many others.

To bring transparency in government procurement, the Government has come up with e-Marketplace (GeM), a dedicated platform for different goods & services procured by government organisations/departments/PSUs, offering 11,900 product categories and 321 service categories. Similarly, initiatives like MyGov and UMANG empower citizens with direct access to many government services, streamlining interactions and increasing accountability. Back-end digitisation fosters data-driven decision-making, driving efficient policy formulation and resource allocation.

Strengthening the digital revolution, initiatives like Aadhaar, the unique digital identity program, have empowered millions with access to essential services and financial inclusion. Aadhaar holders executed ~2 Bn authentication transactions in April 2023, a jump of more than ~19% over April 2022, indicating the growth of the digital economy and usage of Aadhaar in India.

In order to enable citizens to use digital services, high-speed internet connectivity is being extended to even the most remote parts of the country. There are over 888 Mn broadband users in India as of October 31, 2023. With 5,90,020 Common Service Centres (CSCs), including 4,68,773 CSCs in rural areas, India is working on a mission mode to bridge the digital divide. This connectivity underpins a thriving digital economy, fostering innovation and entrepreneurship.

Empowering citizens is at the heart of Digital India. Initiatives like Digilocker provide secure document management, while regional language email services like DataMail bridge the linguistic gap. Pradhan Mantri Grameen Digital Saksharta Abhiyan (PMGDisha), the world's largest digital literacy program, equips rural communities with essential digital skills like marketing, e-commerce, finance, and cybersecurity, enabling them to participate fully in the digital economy. Under the scheme, 4,38,570 PMGDisha training centres in India have certified ~47 Mn trainees.

Technologies Catalysing Digitalisation 

Emerging technologies have played a key role in fuelling the growth of the Indian economy. Technologies like cloud computing and artificial intelligence have helped businesses in India become more efficient and productive. By harnessing these technologies, they gain access to predictive analytics that identify trends and customer preferences. An insight into some emerging trends in this field:

Artificial Intelligence

Integrating AI offers automation in governance and enhanced protection against evolving threats, safeguarding both government and businesses. The Government has also established the IndiaAI initiative to leverage transformative technologies to foster inclusion, innovation, and adoption for social impact. The FY 2022-23 Union Budget also outlined plans to set up three AI centres of excellence in premier educational institutions, a significant step towards making ‘Make AI in India and Make AI work for India’. The initiative aims to foster interdisciplinary research to develop cutting-edge applications and scalable problem solutions in the areas of agriculture, health, and sustainable cities, which will galvanise an effective AI ecosystem and nurture quality human resources in the field. In September 2023, the Government of India, in collaboration with the EKstep Foundation, launched an AI chatbot with PM-Kisan, India’s direct benefit transfer program for farmers, to extend financial help to farmers who own their land. This farmer-friendly bot helps check eligibility and payment status and solve grievances, all with voice commands. Over 5 Lakh farmers used it on day one, depicting the level of penetration and acceptance AI is receiving in India. The demand and supply gap for digital tech talent is expected to increase by 3.5 times by 2026, making the next 25 years a watershed moment for India to establish itself as a technological and economic powerhouse. Addressing the growing demand for tech talent, MeitY has also set up FutureSkills Prime, in association with the National Association of Software and Service Companies (NASSCOM), to provide cutting-edge skills essential in today's rapidly evolving digital landscape. Owing to the above initiatives and policies, the Stanford AI Index report 2023 ranked India 1st in terms of AI skill penetration rate.

Blockchain 

Blockchain is a fast-growing technology that presents exciting possibilities to revolutionise the tech landscape in India. It helps secure, inclusive, and transparent transactions for KYC authentication, supply chain, identity management, document verification, record management, healthcare and validation of financial transactions. The emergence of blockchain technology holds promise for the government to foster trust and greater transparency about certain data activities and provide frictionless transactions with the citizens. The Centre of Excellence in Blockchain Technology is an initiative by the government in this direction to operate as a coordinated, interoperable blockchain ecosystem around the nation. The CoE runs five live chains, including certificate, judiciary, document, logistics, and property blockchains, onboarding 20 centre and state departments, providing seamless digital services to the citizens.

Internet of Things

The Internet of Things (IoT), a technological platform that integrates several machines with built-in sensors that record real-time data like images, videos, motion, acceleration, and temperature, provides valuable information for businesses and helps small enterprises grow rapidly in India. IoT is weaving a web of connectivity, offering solutions in healthcare, agriculture, disaster relief, supply chain management, and urban management, such as using IoT-enabled sensors to record the quality of air, water, and soil, using IoT in manufacturing to enable connectivity across machines to ensure higher operational efficiency, connecting multiple devices like cameras, GPS trackers, and mobile devices for a higher influx of real-time data, and more. The ‘Centre Of Excellence for IoT and AI’ is an initiative by MeitY & NASSCOM in collaboration with the state governments of Karnataka, Haryana, Andhra Pradesh and Gujarat, helping deep-tech startups to grow in India by assisting them with funding, incubation, acceleration, mentoring support and enterprise connect. The ‘Centre of Excellence (CoE) in Intelligent Internet of Things (IIoT) Sensors’ at Maker Village, Kochi, is working to catalyse the development of sensors within the realm of Intelligent IoT systems covering a broad spectrum of applications of intelligent sensors in networks, devices and sensor systems. Tech giants are recognising the immense potential of India’s digital market. Google, under the Google for India Digitization Fund, will invest $10 Bn by 2025 to help MSMEs digitise their business operations. Microsoft will skill 1 Lakh developers in India in the latest AI technologies and tools under its AI Odyssey initiative. The company will also invest INR 16,000 Cr to set up 3 more data centres in Telangana, in addition to its first captive data centre of three campuses in early 2022 - taking the number of proposed Microsoft data centres in India to 6. Anchored in growing digitisation needs, skilled tech talent, enabling policy framework and world-class infrastructure, India’s digital journey is poised to make giant strides with these collaborations that bring global expertise and resources.

Conclusion

The fruits of Digital India are evident in numerous success stories. MyGov’s UMANG app empowers more than 50 Mn users with access to over 1700 government services, while e-Hospital simplifies healthcare access for over 380 Mn registered patients. PMGDisha has transformed rural communities, with over 50 Mn individuals trained and certified in digital skills. Aadhaar, with its 2 Bn authentication transactions per month, stands as a testament to its role in streamlining welfare delivery and promoting financial inclusion. The record-breaking 118 Bn UPI transactions in 2023 highlight the digital transformation of the financial landscape.

These diverse examples paint a vivid picture of Digital India’s revolutionary impact. From improved governance and empowered citizens to a thriving digital economy and a future brimming with technological possibilities, Digital India is paving the way for a more inclusive, prosperous, and digitally connected India.

Source: Investindia.gov.in

India's journey towards becoming a developed nation by 2047 hinges significantly on improving its infrastructure, a cornerstone for fostering liveable, climate-resilient, and inclusive cities that drive economic growth. The government's commitment is evident through its allocation of 3.3% of GDP to the infrastructure sector in the fiscal year 2024, with particular focus on the transport and logistics segments.

Roads & Highways account for the highest share, followed by Railways and Urban Public Transport. The government has set ambitious targets for the transport sector, including development of 2 lakh-km national highway network by 2025 and expanding airports to 220. Additionally, plans include operationalizing 23 waterways by 2030 and developing 35 Multi-Modal Logistics Parks (MMLPs). The total budgetary outlay for infrastructure-related ministries increased from around INR 3.7 Lakh Cr in FY23 to INR 5 Lakh Cr in FY24, offering investment prospects for the private sector across various transport sub-segments. As the transport sector gears up to address sustainability challenges, the private sector stands poised to capitalize on the conducive policy environment to accelerate infrastructure investments. Public-Private Partnerships (PPPs) have served as a vital mechanism for private sector engagement across various infrastructure domains, notably in the construction of airports, ports, highways, and logistics parks throughout India. Besides support from the central government and states across various schemes, India needs a significant push from Public-Private Partnerships to achieve its goal of reaching a $5 Trillion economy by 2025.

In 2021, the government launched the PM Gatishakti National Master Plan (NMP) with a focus on major transport sectors to enhance multimodal connectivity infrastructure in various economic zones. It aims to bring together the infrastructure schemes such as Bharatmala, Sagarmala, UDAN etc. under a digital platform. The NMP offers a detailed database of trunk and utility infrastructure, ongoing and future projects from different ministries/departments of both the Central Government and States/UTs. Integrated with the GIS-enabled PM Gatishakti platform, this allows for streamlined planning, design, and monitoring of next-generation infrastructure projects on a single portal. As per the India Investment Grid (IIG) database, there are currently 15,580 projects worth $2388.93 Bn at various stages of development.

Alongside this, the National Logistics Policy, addresses the development of integrated infrastructure and efficiency in services, including processes and regulatory frameworks, through its Comprehensive Logistics Action Plan (CLAP). Together, the NMP and the National Logistics Policy provide a framework for creating a data-driven decision support mechanism to enhance logistics efficiency and reduce costs in the country's logistics ecosystem.

Major plans of Indian Infrastructure: 

• Roads: The Bharatmala Pariyojana is progressing with Phase I focusing on developing 34,800 km of National Highways. It emphasizes corridor-based development and is set to conclude by 2027-2028, covering 31 States/UTs and over 550 districts. Additionally, the government targets building 22 new greenfield expressways, signalling significant advancements in India's transportation infrastructure.
• Airports: The Ministry of Civil Aviation's flagship Regional Connectivity Scheme UDAN (Ude Desh Ka Aam Nagarik) aims to enhance air connectivity to regional airports in small towns. Launched in 2016, UDAN focuses on making flight services accessible to common citizens by developing infrastructure and air connectivity. In its first 5 years, UDAN served over one crore passengers, inaugurating 425 new routes and 58 airports. The Budget for 2023–24 allocated INR 1,244.07 Cr to UDAN, doubling the previous year's budget, with plans to revive 22 airports. Additionally, the government outlined the revival of 50 additional airports, heliports, water aerodromes, and advanced landing grounds.
• Railways: India's railway sector is undertaking ambitious projects such as the Mumbai-Ahmedabad Speed Rail Corridor, the world's highest pier bridge under construction, and the Chenab bridge in Jammu & Kashmir - the world's highest railway bridge. With a total Broad Gauge network of 61,508 km electrified as of December 2023, the sector has also introduced 35 indigenously designed Vande Bharat Express trains, with six more set to launch soon. These trains serve up to 247 districts across the country. Indian Railways aims to become a Net Zero Carbon Emitter by 2030, with 211 MW of solar plants and 103 MW of wind power plants commissioned as of October 2023, along with 2150 MW of renewable capacity tied up.
• Ports: Indian Ports "Turn Around Time" has reached 0.9 days which is better than USA (1.5 days), Australia (1.7 days) and Singapore (1.0 days), as per the World Bank's Logistics Performance Index (LPI) Report 2023. Sagarmala, the flagship Central Sector Scheme of the Ministry of Ports, Shipping and Waterways, promotes port-led development in the country through harnessing India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes. The Union Minister for Ports, Shipping and Waterways said that the country’s total port capacity will increase from the existing 2,600 MTPA (Mn Tonnes per annum) to more than 10,000 MTPA in 2047. From April to November 2023, cargo of 86.47 MMT moved through Waterways as compared to 80.44 MMT during April to November 2022, i.e. an increase of 7.49%. The government also aims to operationalise 23 waterways by 2030.

Private sector participation is vital for financing key infrastructure projects in India, given the government's fiscal constraints and the need for prudent spending. India launched the National Infrastructure Pipeline (NIP), in 2020 which envisages an investment of INR 111 Lakh Cr over 2020 to 2025 i.e., an annual average investment of almost INR 22 Lakh Cr. Public Private Partnerships (PPP) have been identified as a valuable instrument to speed up infrastructure development and investments envisaged under NIP. Involving the private sector promotes industry competitiveness, enabling access to a wider talent pool and enhanced resource utilization. There are several PPP projects currently in pipeline across sectors such as the development of Pune metro line 3, Hyderabad and Bengaluru metro extensions, development of multi modal logistics park in Chennai, and more.

It is essential for India to prioritize the development of both urban and rural areas to ensure overall national progress. By 2030, it is projected that 40% of India's population will reside in urban areas, contributing significantly to the country's GDP. However, rapid urbanization poses challenges in managing infrastructure and delivering services effectively. The Smart Cities Mission is a key initiative aimed at addressing these challenges efficiently. As of February 2024, 6,753 projects out of a total of 7,991 have been completed under the Smart Cities Mission, showcasing tangible progress. Moreover, India has made significant strides in digital infrastructure development, with rural areas expected to contribute significantly to new internet user growth, with around 56% of total new internet users coming from rural India by 2025, according to a report by TransUnion CIBIL. This trend underscores the increasing connectivity between rural and urban regions in the country.

Conclusion 

The infrastructure sector plays a pivotal role in driving India's economic growth and overall development. As the country continues on its path towards becoming a global economic powerhouse, the need for robust infrastructure becomes increasingly apparent. Private sector partnerships have emerged as crucial enablers in this endeavour, bringing in much-needed investment, innovation, and efficiency. By leveraging public-private partnerships (PPPs), India can accelerate infrastructure development while ensuring sustainability and inclusivity. These partnerships not only help bridge the financing gap but also foster competition, encourage technological advancements, and promote best practices in project execution. Ultimately, the collaboration between the government and the private sector is essential for creating resilient, future-ready infrastructure that paves the way for a prosperous and sustainable future for all citizens of India.

Source: investindia.gov.in