Gujarat unveils major infra investment plans

An ambitious investment of $2.5trn by 2020 will be made across 19 infrastructure sectors in the state of Gujarat, located in the western part of India. The state government is also considering setting up an equity fund of over $1bn in order to fund infrastructure projects at initial stages.

The government of the Indian state of Gujarat is considering an investment of Rs118,091 billion (€2.2 trillion; $2.5 trillion) across 19 infrastructure sectors within the state up to the year 2020, according to a report released by the Gujarat government.

An ambitious document – The Blueprint for Infrastructure in Gujarat 2020 (BIG 2020) – says the state is seeking investment from the private sector in areas such as energy, transportation, SEZs/investment regions, urban infrastructure, water, tourism, IT, education and health and human resource development.

The report says the “bulk of the funding (79 per cent) has to come through the public-private partnership (PPP) route”. Hence: “All actions with respect to enabling private investments need to be accelerated.”

Meanwhile, the report also mentions setting up a private equity fund of Rs50 billion (€857.3 million; $1.1 billion) in order to invest in infrastructure projects in the early stages of implementation. The role of this fund will be to catalyse other sources of equity fund investment in the projects.

Along with setting up the equity fund, the government also plans to amend the Gujarat Infrastructure Development Act, 1999 to appoint developers through direct negotiations for specific projects instead of taking the competitive tender route that existed previously.
Identifying land acquisition as one of the main hurdles in delaying infrastructure projects, the report proposes to amend regulatory acts to ensure quick movement of projects. Pointing out that the problem still remains an emotional issue with farmers, the report admits: “Earlier, the opposition resulted in delays in acquisition of individual land parcels, creating spatial discontent. Now, entire groups of affected land owners come together in highly organised resistance.”

This is the second infrastructure vision report launched by the government of Gujarat. It previously launched a report entitled Vision 2010, which was the first holistic report on Gujarat’s infrastructure development plan.