Infrastructure and economic development in India

India’s journey towards becoming a developed nation by 2047 pivots significantly on improving its infrastructure, a foundation for development, and liveable, climate-resilient, and inclusive cities that drive economic growth.

The infrastructure development of a country is assessed on economic infrastructure development that is the development of various sectors like Energy, Power, Telecom, and Transport (Railways, Roadways, Aviation, and Shipping), which are just a few of the sub-groups that make up the sector, and the social infrastructures like health, education.

Energy infrastructures include many constituents like generation, transmission, and distribution of electricity; physical networks of oil and natural gas pipelines; oil refineries; and other transportation elements such as marine and rail transportation.

Electric systems generally consist of power generation, transmission, and distribution systems connected to large regional power grids. Electricity infrastructure also consists of the equipment and services necessary to take electrical energy generated from things like hydroelectric dams, fossil fuel (coal, natural gas, or oil), nuclear, solar, wind, geothermal, and biomass power plants (or electrical energy stored by energy storage systems) and transmit it to end-use residential, commercial, and industrial customers.

Oil and natural gas systems generally include production (mining and extraction), refining, storage, and distribution systems (pipelines and fuel terminals, railways, trucking, and marine vessels).

Telecom (Digital) infrastructure: India has made impressive success in digital infrastructure development, with rural areas expected to contribute substantial growth to new internet users, with around 56% of total new internet users coming from rural India by 2025, according to a report by TransUnion CIBIL. This trend underscores the increasing connectivity between rural and urban regions in the country.

Transport infrastructure consists of fixed installations including roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses, and trucking terminals. The physical components of transport infrastructure include bridges, tunnels, pavements, rail tracks, culverts, wharfs, aprons, and pipes. These elements are located on the ground or above or below ground level – but are always associated with or attached to the ground. The Roads & Highways account for the highest share, followed by Railways and Urban Public Transport. Road Transport has emerged as the dominant segment in India’s transportation sector with a share of 4.5% in India’s GDP in 2005-06. The Road Transport Sector carries almost 85 percent of the country’s passenger traffic and more than 60 percent of its freight. Rail carried some 19.8 million passengers and 2.4 million tonnes of freight a day in year 2009. Major improvements in the sector are therefore required to support the country’s continued economic growth and reduce poverty.

Major plans of Indian Infrastructure:

The government’s commitment is evident through its allocation of 3.3% of GDP to the infrastructure sector in the fiscal year 2024, with a particular focus on the transport and logistics segments. India has a target of a $5 Trillion economy by 2025.

The Government of India launched the National Infrastructure Pipeline (NIP), in 2020 which envisages an investment of INR 111 Lakh Cr from 2020 to 2025 i.e., an annual average investment of almost INR 22 Lakh Cr. Alongside NIP, the National Logistics Policy (NLP), addresses the development of integrated infrastructure and efficiency in services, including processes and regulatory frameworks, through its Comprehensive Logistics Action Plan (CLAP).

The National Monetisation Pipeline (NMP) was launched in August 2021 and was designed to unlock the value of investments in such under-utilised public sector assets by tapping institutional and long-term capital. The National Monetisastion Pipeline (NMP) envisages an aggregate monetisation potential of Rs 6-lakh crore through the leasing of core assets of the Central government in sectors such as roads, railways, power, oil and gas pipelines, telecom, civil aviation, etc. over four years (FY 2022-25). Together, the NMP and NLP provide a framework for creating a data-driven decision support mechanism to enhance logistics efficiency and reduce costs in the country’s logistics ecosystem.

The PM Gatishakti National Master Plan was launched by the Government in 2021 to bring together the infrastructure schemes such as Bharatmala, Sagarmala, UDAN, etc. under a digital platform with a focus on major transport sectors to enhance multimodal connectivity infrastructure in various economic zones. The PM Gatishakti platform integrated with the computerized GIS, (geographic information systems), used to store, visualize, analyze, and interpret geographic data, allows for streamlined planning, design, and monitoring of next-generation infrastructure projects on a single portal. As per the India Investment Grid (IIG) database, there are currently 15,580 projects worth $2388.93 Bn at various stages of development. 

The government has set ambitious targets for the development of a 2 lakh-km national highway network by 2025 and expanding airports to 220. In addition, the Government plans to operationalize 23 waterways by 2030 and develop 35 Multi-Modal Logistics Parks (MMLPs). The total budgetary outlay for infrastructure-related ministries increased from around INR 3.7 Lakh Cr in FY23 to INR 5 Lakh Cr in FY24, offering investment prospects for the private sector across various transport sub-segments.

As the transport sector gears up to address sustainability challenges, the private sector stands poised to capitalize on the conducive policy environment to accelerate infrastructure investments. Public-private partnerships (PPPs) have served as a vital mechanism for private sector engagement across various infrastructure domains, notably in the construction of airports, ports, highways, and logistics parks throughout India.

The Bharatmala Pariyojana is progressing with Phase I focusing on developing 34,800 km of National Highways. It emphasizes corridor-based development and is set to conclude by 2027-2028, covering 31 States/UTs and over 550 districts. Additionally, the government targets building 22 new Greenfield expressways, signaling significant advancements in India’s transportation infrastructure.

Airports: The Ministry of Civil Aviation’s flagship Regional Connectivity Scheme UDAN (Ude Desh Ka Aam Nagarik) aims to enhance air connectivity to regional airports in small towns. Launched in 2016, UDAN focuses on making flight services accessible to common citizens by developing infrastructure and air connectivity. In its first 5 years, UDAN served over one crore passengers, inaugurating 425 new routes and 58 airports. The Budget for 2023–24 allocated INR 1,244.07 Cr to UDAN, doubling the previous year’s budget, with plans to revive 22 airports. Additionally, the government outlined the revival of 50 additional airports, heliports, water aerodromes, and advanced landing grounds.

Railways: India’s railway sector is undertaking ambitious projects such as the Mumbai-Ahmedabad Speed Rail Corridor, the world’s highest pier bridge under construction, and the Chenab Bridge in Jammu & Kashmir – the world’s highest railway bridge. With a total Broad Gauge network of 61,508 km electrified as of December 2023, the sector has also introduced 35 indigenously designed Vande Bharat Express trains, with six more set to launch soon. These trains serve up to 247 districts across the country. Indian Railways aims to become a Net Zero Carbon Emitter by 2030, with 211 MW of solar plants and 103 MW of wind power plants commissioned as of October 2023, along with 2150 MW of renewable capacity tied up.

Ports: Indian Ports “Turnaround Time” has reached 0.9 days which is better than the USA (1.5 days), Australia (1.7 days), and Singapore (1.0 days), as per the World Bank’s Logistics Performance Index (LPI) Report 2023. Sagarmala, the flagship Central Sector Scheme of the Ministry of Ports, Shipping and Waterways, promotes port-led development in the country through harnessing India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways, and strategic location on key international maritime trade routes. The Union Minister for Ports, Shipping and Waterways said that the country’s total port capacity will increase from the existing 2,600 MTPA (Mn Tonnes per annum) to more than 10,000 MTPA in 2047. From April to November 2023, cargo of 86.47 MMT moved through Waterways as compared to 80.44 MMT during April to November 2022, i.e. an increase of 7.49%. The government also aims to operationalise 23 waterways by 2030. 

Sources: Various sources including Invest India, newspapers, and Internet media

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