Infra investment needs a financial boost

29 Apr 2020

The National Infrastructure Pipeline (NIP) of projects has been prepared by a task force, which indicates broad sectorwise investments. Financing investment of this order was seen as the key challenge. If the NIP is to be implemented, the government must put in place avenues for long-term financing of infra projects. Sectors like water need long-term debt on concessional interest rates. So do the Smart City Mission and Mass Transport Projects. When the debt repayment is spread over, say 25- 40 years, the annual debt payment is far lower and debt servicing is that much easier. Only the government can give the guarantees, implicit as well as explicit, needed to take care of the asset-liability mismatch inherent in providing such long-term debt.

Tags
Infrastructure development