As I write this, our Prime Minister is already in the UAE, making his second trip in less than three years, to accelerate the infrastructure thrust that the two countries have agreed upon. Last year, UAE investors announced nearly $2.5 billion worth of investments in India, including a $1 billion investment by Abu Dhabi Investment Authority (ADIA), a $1 billion investment by NRI-Emirati Investor's Group, and a further $460 million investment by Lulu Group in Andhra Pradesh.
The two countries have set up a multi-billion dollar fund-under the National Investment and Infrastructure Fund (NIIF)-to tap into investment opportunities in India's infrastructure sector. The fund plans to raise up to $75 billion to support investment in railways, ports, roads, airports, industrial corridors and parks. ADIA has deployed its funds in real estate, private equity, and has backed two of the largest renewable energy companies in India, investing over $400 million in ReNew Power and Greenko. DP World, the Dubai-based port operator, and NIIF plan to jointly invest up to $3 billion on ports, terminals, transportation and logistics businesses in India.
Getting FDI to build infrastructure is the wisest way forward for India as its infrastructure sector, groaning under debt and policy paralysis for a few years, has just managed to revive. We need more deals of this kind. Korea too has pledged around $10 billion for South Korea's decision to extend $9 billion in credit and $1 billion for three mega projects - Nagpur-Mumbai Supercommunication Expressway (NMSE), Kalyan-Dombivili Smart City and Bandra Government Colony Redevelopment. The Japan International Cooperation Agency (JICA) has extended a total soft loan support amount of approximately Rs 1.50 trillion over the last 10 years.
Finance Minister Arun Jaitley, during his budget speech, outlined India's requirement to be in excess of Rs 50 trillion. He enhanced the budgetary expenditure on infrastructure for 2018-19 by Rs 1 trillion to Rs 5.97 trillion against an estimated expenditure of Rs 4.94 trillion in 2017-18. The budget has provided for plans to complete national highways exceeding 9,000 km length during 2017-18. This will mean about 25 km per day of construction. Railways' capex is taking a huge leap, which has been pegged at Rs 1.49 trillion. On Smart Cities Mission, 99 cities have been selected with an outlay of Rs 2.04 trillion of which projects worth Rs 23.50 billion have been completed and Rs 208.52 billion are in progress. Expectedly, rural focus drew funds too in gigantic proportions and a collective amount of Rs 14.34 trillion has been provided for. The Namami Gange programme is on track, with 187 projects sanctioned for river surface cleaning, rural sanitation and other interventions at a cost of Rs 167.13 billion.
The seriousness of the exercise of actually envisioning an inclusive society seems to grow from the budget as the intent gets laid out by putting æmoney where its mouth is'. The government has identified 115 aspirational districts for improvement in social services like health, education, nutrition, skill upgradation, financial inclusion, and infrastructures like irrigation, rural electrification, potable drinking water and access to toilets at an accelerated pace and in a time-bound manner. So, infrastructure continues to occupy as the means of providing the growth that India needs to sustain its demographic dividend.
Improved GST collections, fruitful divestment and a lower steady oil price scenario can keep the above plan on track. However, global economy and oil price volatility can play spoilers. Infrastructure momentum needs to be kept up and must not get derailed by the din of State elections. We have the mass now; we just need the velocity to get this momentum going.