Slow land acquisition, clearances delay infrastructure plans: centre to states

The Centre has red-flagged a decline in private investments in the country’s infrastructure sector due to delays in land acquisition and clearance approvals for key projects, and urged states to implement land reforms and model policy frameworks to address the challenge.

Data from presentations made at the recent second National Conference of Chief Secretaries reflected a decline in private sector investment in India’s infrastructure sector in recent years as litigations and regulatory clearances continue to dampen appetite and credit access, people aware of the development told ET.

Out of 1,768 delayed central infrastructure projects worth ₹27.2 lakh crore analysed by the Ministry of Statistics and Planning Implementation (Mospi) up to September 2022, the highest time overrun at 26% was due to land acquisition while 22% delays were due to lingering clearances and approvals, as per data shared at the meeting.

Private Sector Decline

Private sector share in the country’s infrastructure investments slipped to 25% in 2019 from 32% in 2013-14, after hitting a high of 35% in 2016.

Private investment through the public-private-partnership (PPP) mode shrunk even more, from 40% in 2010 to 14% in 2020, showed data from the ‘Viksit Bharat’ report on infrastructure shared at the meeting.

Even the roads sector, which has usually drawn private sector interest, is impacted.Despite a slew of policy initiatives, share of private sector investment to total investment in the roads sector “drastically declined” from 42.56% in 2013-14 to 13.59% in 2018-19 while public investment increased to 86.41% from 57.44%, the report said.

Of the Rs 50 lakh-crore infrastructure investments in India between 2014 to 2019, 70% investment was by the public sector (the Centre and states) while the private sector chipped in 30%, data showed.

As much as 85% of the total infrastructure investment was on power, roads, railways, urban development, and digital infrastructure, and it was mainly anchored by the public sector.