Infrastructure Sector in India

Government Initiatives and Investments

Some of the recent government initiatives and investments in the infrastructure sector are as follows:

• On February 14, 2026, The Government of India has strengthened India’s infrastructure and technology ecosystem through major initiatives, including a provision of Rs. 1,000 crore (US$ 106.1 million) for expanding AI infrastructure, establishing data centres, and advanced computing systems, aimed at boosting digital infrastructure and innovation-led growth.
• India’s infrastructure investment has risen sharply from Rs. 1.7 lakh crore (US$ 25.30 billion) in FY16 to over Rs. 11 lakh crore (US$ 119.06 billion), with Budget 2026 further accelerating infrastructure-led growth through higher public capex, private sector participation and outcome-driven urban development initiatives.
• In November 2025, the Union Cabinet approved Phase II of the Pune Metro Rail Project with an estimated cost of Rs. 9,857 crore (US$ 1.13 billion) to build 31.64 km of new corridors (Lines 4 and 4A) with 28 elevated stations, expanding connectivity across East, South and West Pune as part of the city’s Comprehensive Mobility Plan.
• As of August 19, 2025, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Mr. Narendra Modi, approved the construction of a 110.875 km six-lane access-controlled Capital Region Ring Road (Bhubaneswar Bypass) in Odisha on Hybrid Annuity Mode at a total cost of Rs. 8,307 crore (US$ 949 million) to ease congestion, enhance freight efficiency and generate significant employment.
• GST 2.0 is expected to reduce construction costs by 3.5-4.5%, potentially lowering housing prices by 5-8% and boosting demand, especially in the affordable and mid-segment markets.
• As of March 31, 2025, 99.44% of the total Rs. 47,652 crore (US$ 5.56 billion) Union Budget allocation for the Smart Cities Mission, has been released to 100 cities.
• As of June 24, 2025, 94% of the 8,067 projects under the Smart Cities Mission have been completed, with an investment of Rs. 1,64,000 crore (US$ 19.14 billion).
• In 2025, the Prime Minister will lay the foundation for projects worth over Rs. 7,300 crore (US$ 852 million) at Chura Chandpur, Manipur, covering five National Highways, urban roads, and drainage and asset management improvements.
• The government is planning a Rs. 20,000 crore (US$ 2.33 billion) risk guarantee funds to support infrastructure investment, covering losses from policy uncertainty and non-commercial risks to boost investor confidence.
• The Ministry of Railways has allocated Rs. 62,477 crore (US$ 7.29 billion) for the Northeast since 2014, with Rs. 10,440 crore (US$ 1.22 billion) set aside in FY26.
• Railway projects worth Rs. 77,000 crore (US$ 9 billion) are underway in the Northeast, representing the region’s highest-ever investment in rail infrastructure.
• 16, 207 km of National Highways constructed in Northeast Region as of July 2025.
• Under Pradhan Mantri Gram Sadak Yojana (PMGSY), 16,469 road works covering 80,933 km and 2,108 bridges have been completed.
• As of July 2025, 29 projects under NESIDS-OTRI have been sanctioned and are at various stages of implementation, with an expenditure of Rs. 462 crore (US$ 53.9 million) has been incurred so far.
• India's National Highways network expanded to 1,46,342 km in FY25, with 10,660 km constructed during the year.
• As of March 26, 2025, Indian Railways has achieved 100% electrification of its broad-gauge network in 22 out of 29 states and union territories, with work progressing rapidly in the remaining regions. This milestone is part of the broader "Mission 100% Electrification" initiative, which aims to reduce dependency on fossil fuels, decrease diesel consumption, and lower carbon emissions. Notably, electrification has led to a reduction of approximately 136 crore litres in traction fuel consumption from 2018-19 to 2023-24. The initiative also enhances haulage capacity and train speeds, contributing to reduced travel times and improved efficiency.
• As of March 2025, India’s authorised natural gas pipeline network totals 34,233 km, with approximately 25,429 km operational and 10,459 km under construction.
• As of December 2024, 6,92,428 km of Optical Fibre Cable (OFC) has been laid, and 2,09,281 GPs are Service Ready on OFC.
• Under Union Budget 2026-27:
  • The Union Budget 2026–27 aims to strengthen India’s long-term growth trajectory through higher public expenditure, infrastructure expansion, and private sector participation aligned with the vision of Viksit Bharat @2047. Total government expenditure is estimated at Rs. 53.47 lakh crore (US$ 594.1 billion), 7.7% higher than the revised estimate for 2025–26, while nominal GDP growth for 2026–27 is projected at 10%.
  • Public capital expenditure has been increased from Rs. 10.96 lakh crore (US$ 121.8 billion) in the revised estimate of 2025–26 to Rs. 12.22 lakh crore (US$ 135.8 billion) in 2026–27, reflecting an increase of 11.5% to support infrastructure-led economic growth.
  • In the Union Budget 2026–27, the allocation for the Ministry of Road Transport and Highways has been increased to Rs. 3,09,875 crore (US$ 34.4 billion), marking a 7.9% rise over the revised estimate of 2025–26.
  • The government has proposed the establishment of an Infrastructure Risk Guarantee Fund to strengthen private sector confidence in infrastructure development, along with a dedicated pipeline for PPP-led projects and investment.
  • The government has allocated Rs. 22,000 crore (US$ 2.4 billion) towards the PM Surya Ghar Muft Bijli Yojana in 2026–27 to support rooftop solar adoption and clean energy transition.
  • Under the pharmaceuticals sector, the government announced the launch of the Biopharma SHAKTI scheme with an outlay of Rs. 10,000 crore (US$ 1.1 billion) over five years to strengthen domestic manufacturing of biologics and biosimilars.
  • To support MSME growth and industrial expansion, the government proposed the creation of an SME Growth Fund with an outlay of Rs. 10,000 crore (US$ 1.1 billion) and announced plans to revive 200 legacy industrial clusters through technology and infrastructure upgrades.
  • In the Union Budget 2025–26, the government allocated Rs. 6,636.11 crore (US$ 737.35 million) to the Ministry of Development of Northeastern Region to support infrastructure and socio-economic development across the North-Eastern region.
  • The allocation includes Rs. 2,300 crore (US$ 255.56 million) for the Prime Minister's Development Initiative for Northeast Region scheme
• India's infrastructure sector is set for robust growth, with planned investments of US$ 1.4 trillion by 2025. The government's National Infrastructure Pipeline (NIP) program aims to channel significant capital into key areas such as energy, roads, railways, and urban development.
• The PM Gati Shakti National Master Plan aims to unify efforts across key Ministries for integrated infrastructure development. By October 2024, it had onboarded 44 Central Ministries and 36 States/UTs, integrated 1,614 data layers, and assessed 208 major projects worth Rs. 15,39,000 crore (US$ 178.89 billion), aligned with its core principles.
• Union Minister of Road Transport and Highways, Mr. Nitin Gadkari, announced that the Ministry has allocated Rs. 1,255.59 crore (US$ 150.01 million) for the construction of a 28.9 km, four-lane access-controlled Northern Patiala Bypass.
• In October 2024, the Ministry approved 50 National Highway projects spanning 1,026 km in Manipur, with 44 projects covering 902 km located in the hills. Of these, 8 projects totalling 125 km have been completed, while 36 ongoing projects, with an investment of Rs. 12,000 crore (US$ 1.43 billion), will cover the remaining 777 km.
• In June 2024, Ministry of Housing & Urban Affairs has approved proposals worth Rs. 860.35 crore (US$ 103.91 million) for West Bengal under SBM-U 2.0. During the first phase of SBM-U (2014-19) a total fund of Rs. 911.34 Cr (US$ 130.34 million) was allocated to West Bengal which has been increased by 1.5 times to Rs. 1449.30 crore (US$ 175.04 million) in SBM-U 2.0 (2021-26).
• India has the second largest road network in the world and its National Highways network expanded to 1,46,342 km in FY25, with 10,660 km constructed during the year, forming the primary arterial network of the country. The Government of India has undertaken several initiatives to enhance and strengthen the National Highways network through flagship programmes such as the Bharat Mala Pariyojana which includes the subsumed National Highway Development Project (NHDP), the Special Accelerated Road Development Programme for the north-East Region (SARDP-NE), and many more ongoing projects.
• 7 goals for India's economic growth to become a US$ 5 trillion economy. In order to anticipate private sector investment and to address employment and consumption in rural India, the budget places a strong emphasis on the development of roads, shipping, and railways.
• India's ambitious plan calls for spending US$ 1.723 trillion (approximately Rs. 143 trillion) on infrastructure between FY24 and FY30, with a particular emphasis on power, roads, and developing industries like renewable energy and electric vehicles.
• Prime Minister Mr. Narendra Modi emphasized that India is committed to attaining net-zero carbon emissions by 2070, and that the country's ambitious goal of 500 gigawatts (GW) of renewable capacity by 2030 should be met.