Business: ₹5.75 trillion cost escalation hits infra projects
Business: The cost of 1,793 infrastructure projects increased by Rs 5,750,517 million by the end of July. The initial cost of these projects of more than Rs 150 crore was Rs 2,754,025.8 billion, which increased by 20.87 per cent to Rs 3,329,030.97 billion. Official sources told BizBaz that the biggest cost increase was related to the railway project, which cost Rs 2,43,80,866 crore. Initially, 231 projects were estimated at Rs 4,29,86,826 crore, which is now estimated at Rs 6,73,67,692 crore. Next on the list is the additional cost of oil and road projects.
The initial cost of oil projects in 1995 was estimated at Rs 4 million 518 thousand 457 thousand 900 million, but the figure increased to Rs 5 million 165 thousand 7359 million and more than Rs 64727.8 million. The amount for 1052 road projects is Rs 8134.65 million, Rs 865746.4 million and Rs 52281.05 million respectively. Interestingly, 21 infrastructure projects were completed in July and the initial cost was to be Rs 8,648.94 crore, but the final cost of the projects was less than Rs 7,570.75 crore.
Four new projects were added in July at a cost of ₹3,263.92 crore.
It is worth noting that infrastructure development is one of the focus areas of the Narendra Modi government. Finance Minister Nirmala Sitharaman had set aside Rs 1,111.11 billion for capital expenditure in the interim budget. This remained unchanged in the Regular Budget 2024-25 as well. The Finance Minister also began a series of review meetings with ministries and central departments involved in infrastructure development. The aim is to check the progress of capital investment. In his budget speech, he said that the central government has invested heavily in building and improving infrastructure in the last few years, which has had a multiplier effect on the economy. We will work to maintain strong infrastructure funding over the next five years, in line with other fiscal consolidation priorities and needs.
