India is embarking on an ambitious journey to transform its infrastructure landscape, with a significant surge in investment expected between fiscal years 2024 and 2030. CRISIL, a prominent research and rating agency, unveiled these staggering projections during the India Infrastructure Conclave 2023 in New Delhi.
According to CRISIL, India is set to double its infrastructure spending, reaching approximately Rs 143 lakh crore in the seven fiscal years leading up to 2030. This is a substantial increase compared to the roughly Rs 67 lakh crore spent between fiscal years 2017 and 2023. A remarkable portion of this investment, approximately Rs 36.6 lakh crore, is earmarked for green initiatives, marking a fivefold increase compared to the previous seven fiscal years.
Amish Mehta, Managing Director & CEO of CRISIL Ltd, highlighted the implications of this surge in investment, projecting India's gross domestic product to grow at an average rate of 6.7% through fiscal year 2031. As a result, per capita income is expected to rise from around $2,500 to approximately $4,500 by 2031, elevating India to the status of a middle-income country.
The focus of the conclave was on "Building and financing sustainable infrastructure," with special emphasis on funding and capacity-building for sustainable solutions in energy, transportation, and urban development. Key policymakers, industry leaders, and representatives of funding agencies gathered to discuss the future of India's infrastructure landscape.
Shri Nitin Gadkari, Union Minister for Road Transport and Highways, launched the CRISIL Infrastructure Yearbook 2023 at the event, which introduced a unique national index, the CRISIL InfraInvex. This index measures the investment attractiveness of select infrastructure sectors, now incorporating environmental sustainability to reflect its increasing importance in investment decisions.
CRISIL emphasised the need for consistent policies and timely regulatory interventions to maintain India's compelling infrastructure investment thesis over the long term. The future of infrastructure development in India will feature larger projects and an increasing number of mega-scale endeavours, requiring the active involvement of all stakeholders.
The yearbook also shed light on the funding requirements and interventions needed to address the funding-related challenges, particularly in the realms of green financing and the emergence of electric vehicles, renewable energy, battery storage, and hydrogen in shaping sustainable infrastructure development.
It's expected that sectors like roads and power will continue to be major contributors to this transformation, while emerging areas such as electric vehicles and hydrogen are set to gain momentum. India's green transition will also involve the growth of renewable energy, with solar playing a substantial role in non-fossil generation.
The infrastructure sector is poised for significant investments, and measures like sovereign green bond issuance and regulatory evolution will play a crucial role in driving this growth. Balancing growth and environmental concerns will be imperative in ensuring a sustainable and prosperous future for India's infrastructure.