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Infrastructure Sector in India
GOI allocated Rs. 111 lakh crore (US$1.4 trillion) under the NIP for FY2019-25. Sectors such as energy, roads, urban and railways amount to ~71% of the projected infrastructure investments in India.

Infrastructure Sector in India

    Last updated on Jun, 14 2021

Indian Infrastructure Sector in India Industry Report  (Size: 663.64 KB ) (April, 2021)

Introduction

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development.

Market Size

According to the Department for Promotion of Industry and Internal Trade (DPIIT), FDIs in the construction development sector (townships, housing, built up infrastructure and construction development projects) and construction (infrastructure) activities stood at US$ 25.93 billion and US$ 23.99 billion, respectively, between April 2000 and December 2020.

Government Initiative and investment

In Union Budget 2021, the government has given a massive push to the infrastructure sector by allocating Rs. 233,083 crore (US$ 32.02 billion) to enhance the transport infrastructure. The government expanded the ‘National Infrastructure Pipeline (NIP)’ to 7,400 projects. ~217 projects worth Rs. 1.10 lakh crore (US$ 15.09 billion) were completed as of 2020. The key highlights of the Budget 2021 are as follows:

  • In March 2021, the government announced a long-term US$ 82 billion plan to invest in the country’s seaports. ~574 projects have been identified, under the Sagarmala project, for implementation through 2035.
  • In April 2021, the Ministry of Power (MoP) released the draft National Electricity Policy (NEP) 2021. The MoP created an expert committee including members from state governments, the Ministry of New and Renewable Energy (MNRE), NITI Aayog and the Central Electricity Authority (CEA).
  • In March 2021, the Parliament passed a bill to set up the National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in India.
  • Indian railways received Rs. 1,10,055 crore (US$ 15.09 billion), of which Rs. 1,07,100 crore (US$ 14.69 billion) is for capital expenditure.
  • Rs. 1,18,101 crore (US$ 16.20 billion) has been allocated towards road transport and highway sector.
  • In Budget 2021, the government announced the following interventions under Pradhan Mantri Aatmanirbhar Swasth Bharat Yojana (PMANSY):
    • An outlay of Rs. 64,180 crore (US$ 8.80 billion) over six years to strengthen the existing ‘National Health Mission’ by developing capacities of primary, secondary & tertiary care and healthcare systems & institutions to detect and cure new and emerging diseases.
    • This scheme will strengthen 17,000 rural and 11,000 urban health and wellness centres.
    • Setting up integrated public health labs in all districts and 3,382 block public health units in 11 states.
    • Establishing critical care hospital blocks in 602 districts and 12 central institutions.
    • Strengthening the NCDC (National Centre for Disease Control) to have five regional branches and 20 metropolitan health surveillance units.
    • Expanding integrated health information portal to all states/UTs.
    • Rolling out the pneumococcal vaccine, a ‘Made in India’ product, across the country.
    • Rs. 35,000 crore (US$ 4.80 billion) has been allocated for COVID-19 vaccines in FY22.
  • The government announced Rs. 18,998 crore (US$ 2.61 billion) for metro projects.
  • Mega Investment Textiles Parks (MITRA) scheme was launched to establish world-class infrastructure in the textile sector and establish seven textile parks over three years.
  • The government announced Rs. 305,984 crore (US$ 42 billion) over the next five years for a revamped, reforms-based and result-linked new power distribution sector scheme.

Road Ahead

The infrastructure sector has become the biggest focus area for the Government of India. India plans to spend US$ 1.4 trillion on infrastructure during 2019-23 to have a sustainable development of the country. The Government has suggested investment of Rs. 5,000,000 crore (US$ 750 billion) for railways infrastructure from 2018-30.

India and Japan have joined hands for infrastructure development in India's Northeast states and are also setting up an India-Japan Coordination Forum for Development of Northeast to undertake strategic infrastructure projects for the region.

Note: Conversion rate used for April 2021 is Rs. 1 = US$ 0.01334

References: Media Reports, Press releases, National Infrastructure Pipeline, Union Budget 2021-22, Ministry of Commerce and Industry, Economic Survey-2020-21

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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