The Indian Infrastructure Industry Growth Story - Opportunities and Challenges

Indian Infrastructure to keep growing in 2024 & beyond

By 2027, the Indian construction market is anticipated to have grown at a CAGR of 17.26%, from 2022 to 2027, and reach $1.42 trillion.

Infrastructure development in India is fueled by numerous factors, one of which is the substantial growth in demand from a very youthful population.

India faces the formidable task of improving its infrastructure in order to achieve its economic development objective of $5 trillion by 2025.

Roads, railways, aviation, maritime, and inland waterway investments are all necessary to better India's transport infrastructure in order to accommodate the country's expanding population and economic progress.

Prominent benefits include enhanced commercial and entrepreneurial prospects, as well as a multiplier effect on transportation demand and efficacy.

In June 2022, the Minister of Road Transport and Highways inaugurated fifteen national highway projects in Patna and Hajipur, Bihar, valued at Rs. 13,585 crores (approximately USD 1.7 billion).

A contract for the construction of various types of infrastructure in Jammu and Kashmir, such as medical colleges, specialised hospitals, IT towers, and multipurpose towers, was signed between the Dubai government and India in October 2021.

The Assistance Of The Government

In addition, the 50-year interest-free loan extended to state governments for an additional year is maintained in Budget 2023-24. This extension is intended to encourage infrastructure investment and motivate governments to implement complementary policy measures. The substantial increase in expenditure amounts to ₹ 1.3 lakh crore (equivalent to $16 billion).

Projects under the National Infrastructure Pipeline (NIP) are presently in various phases of implementation and are valued at Rs. 108 trillion (USD 1.3 trillion).

The National Investment and Infrastructure Fund (NIIF), established in November 2022, serves as a collaborative investment platform among the India Japan Fund, the Government of India, global investors, multilateral development banks (MDB), and domestic financial institutions. Its purpose is to facilitate investment in India across various sectors.

Investment Allocations: The Budget for 2023-24, presented by Finance Minister Nirmala Sitharaman, emphasises the continued importance of "inclusive development" in the northeast as one of seven priorities that serve as the "Saptarishi" that direct the government "through the Amrit Kaal."

Capital investment expenditures for infrastructure are projected to increase by 33% to Rs.10 lakh crore (US$122 billion) in Budget 2023-24. This equates to approximately three times the expenditures in 2019-20 and represents 3.3% of GDP.

As part of the budget for 2023–24, the Infrastructure Finance Secretariat will assist all stakeholders in securing a greater amount of private investment in power, railways, highways, and urban infrastructure. Its purpose is to facilitate opportunities for private investment in infrastructure.