It’s Modi, who turned around infra, says FM

Infra sector, which suffered due to policy paralysis during the UPA regime. It wasted India’s economic growth potential and left it among the ‘Fragile Five’ economies without focusing on effective infrastructure development - Nirmala Sitharaman, Finance Minister

New Delhi: Prime Minister Narendra Modi active role and personal monitoring is responsible for the turnaround of the infrastructure sector, which suffered due to policy paralysis during the UPA regime, Finance Minister Nirmala Sitharaman said on Wednesday.

In a contrast to the previous regime, the current government under the leadership of Modi has spearheaded a shift towards prioritising infrastructure development and capital expenditure with an aim to bolster the Indian economy. Taking a dig at the Congress-led UPA regime from 2004-2014, she said, “@INCIndia-led UPA (2004-14) wasted India’s economic growth potential and left it among the ‘Fragile Five’ economies without focusing on effective infrastructure development. Under UPA, almost all aspects of India’s economic needs were mismanaged or ignored.”

The UPA government’s noticeable and deliberate neglect of infrastructure creation not only denied India much-needed roads, railways, power, etc, but it also compromised India’s long-term economic potential, she said in a post on X.

“The UPA government’s term was replete with examples of decision stasis. Cost overruns, stalled projects and lack of timely approvals were common between 2004-14,” she said. However, she said, “Prime Minister Modi’s active role has made the infrastructure turnaround possible. PM has personally monitored the progress of projects, even those launched earlier, through the PRAGATI platform.

“This led to the successful completion of long-delayed projects. Through 43 PRAGATI meetings, PM Modi has reviewed projects worth Rs 17.36 lakh crore.” Pointing out that infrastructure spending not only boosts GDP growth through its multiplier effects on consumption and investment, but also improves the long-term efficiency of the economy by reducing logistical constraints, she said, adding that an NIPFP study points out that every rupee directed towards capital expenditure in India increases economic output by Rs 4.8. The share of capex in total expenditure dropped sharply under the UPA from 23 per cent in 2003-04 to an average of 12 per cent between 2005 and 2014, she said. “It is also unwise to expect that @INCIndia would have learnt from their mistakes. INCIndia returns to their neglect of Capex and infrastructure. The 2024 Budget presented by the Congress government in Karnataka slashed the share of capital expenditure in total spending by 28 per cent,” she said.

Imagine the opportunity cost lost due to Congress not investing adequately in capital expenditure, Sitharaman said. “Our government significantly increased the outlay for capex. As a proportion of total expenditure, Capex rose to over 21 per cent in 2023-24, compared to just 12 per cent in 2013-14,” she said.

Since 2014, the Modi government has allocated a total of Rs 43.53 lakh crore in Gross Budgetary Support (GBS) capital expenditure, an increase of 3.72 times compared to 2004-14. Giving details of various segments, Sitharaman said, 3.74 lakh km of rural roads have been built under the PM Gram Sadak Yojana in the last 10 years, almost double of 3.81 lakh km of rural roads built till 2014. Over 99 per cent of rural habitations are now linked with rural roads. Since 2014, there has been a 500 per cent increase in road transport and highway budget allocation, she added. National Highway (NH) network has expanded 60 per cent from 91,287 km in 2014 to 1,46,145 km by 2023; compared to only 39 per cent expansion from 65,569 km to 91,287 km between 2004-14. Under PM Modi, Indian Railways has ushered into an era of modernisation with modern stations, modern trains, modern facilities and modern technology.