India is set to embark on a monumental journey of infrastructure development, with investments projected to reach an impressive Rs 143 trillion between the financial years FY24 and FY30, according to analytics firm Crisil. This substantial commitment to infrastructure development signifies a remarkable shift, as it more than doubles the Rs 67 lakh crore spent in the previous seven financial years.
Crisil’s Managing Director and Chief Executive Officer, Amish Mehta, emphasized that India’s gross domestic product (GDP) is poised for robust growth, with an average of 6.7 percent through FY31. This trajectory is expected to position India as the fastest-expanding large economy globally. Mehta also highlighted that per capita income is anticipated to rise from USD 2,500 to USD 4,500 by fiscal year 2031, effectively elevating India to the status of a middle-income country. This remarkable growth is intrinsically tied to comprehensive infrastructure development, with a strong emphasis on sustainability.
Notably, green investments are projected to experience a five-fold increase, surging to Rs 36.6 trillion over the next seven years. This significant boost in green investments underscores India’s commitment to environmental sustainability and the transition towards a greener economy.
Crisil’s assessment envisions the next phase of infrastructure development as characterized by the growth in the average project size and a substantial number of mega-scale projects. The report underscores the importance of consistent policy and regulatory interventions and a dedicated focus on timely project execution. These factors are instrumental in creating a compelling case for diverse stakeholders to accelerate investments across various infrastructure sectors.
According to Crisil, established sectors like roads and power are expected to continue as significant contributors to the infrastructure landscape. Simultaneously, emerging sectors like electric vehicles (EVs), solar energy, wind power, and hydrogen are poised to gain momentum in the coming years.
Of particular interest is the surge in EV adoption, with the share of EVs in India’s overall automobile sales predicted to reach 30 percent by 2030. Furthermore, the two-wheeler EV segment is expected to outpace other segments until 2028.
While green investments in fuels are on the rise, there is a growing emphasis on leveraging emerging technologies such as ‘floatovoltaics’ (floating solar panels), offshore wind technology, and green hydrogen.
Crisil also notes that India’s hydrogen sector, while nascent presently, is primed for substantial investments, projected at around Rs 1.5 lakh crore between FY24 and FY30. This growth is attributed to government incentive schemes and mandates promoting the use of green hydrogen. It’s noteworthy that green hydrogen production costs are twice as high as fossil-based hydrogen, making government support crucial for its development.
To meet the substantial investment requirements in core infrastructure sectors, Crisil suggests accelerating bond market activity, attracting foreign investments, and maintaining strong equity markets. The introduction of India’s first sovereign green bond issuance is expected to stimulate the development of the domestic bond market for green initiatives, aligning with the growing global appetite for environmentally responsible investments.
India’s commitment to infrastructure development, coupled with a focus on sustainability and green investments, positions the nation for substantial economic growth and transformation.
