The Future Of Infrastructure In India | srei
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The Future Of Infrastructure In India

For any country, its infrastructure is a matter of pride. From roadways, railways to airports and other smart-city initiatives, the last few years have witnessed a phenomenal change in the sector, leading to world-class facilities coming up across various parts in the country. Infrastructure Industry  in India has been experiencing rapid growth in its different sectors with the development of urbanization and increasing involvement of foreign investments in this field. 

Infrastructure growth is visible throughout the country in the form of new highways, roads, ports, railways and airports, power plants, urban and rural infrastructure, including water supply, sewerage, and drainage, irrigation and agriculture systems. The Indian economy is booming, with rates of Gross Domestic Product (GDP) growth exceeding 8% every year since 2003/04. This ongoing growth is due to rapidly developing services and manufacturing sectors, increasing consumer demand (largely driven by increased spending by India’s middle class) and government commitments to rejuvenate the agricultural sector and improve the economic conditions of India’s rural population. Construction is the second largest economic activity in India after agriculture, and has been growing rapidly. The production of industrial machinery has also been on the rise and the increasing flow of goods has spurred increases in rail, road and port traffic, necessitating further infrastructure improvements.

Reasons to invest in India:

  • One of the world’s fastest growing economies – and growth expected to continue at 7-7.5% despite the global downturn
  • Few restrictions on foreign direct investment (FDI) for infrastructure projects
  • Tax holidays for developers of most types of infrastructure projects, some of which are of limited duration
  • Opening up of the infrastructure sector through PPPs

 

Projected spending from FY07-FY12 in selected infrastructure segments:

  • Electricity: US$167 billion 
  • Railways: US$65 billion
  • Road and highways: US$92 billion
  • Ports: US$22 billion
  • Airports: US$8 billion

 

Looking ahead, we believe it is imperative that infrastructure development occurs in a sustainable manner in India and around the globe, if the impact of climate change is to be slowed to broadly acceptable levels. The Indian Government must maintain a commitment to ensuring that rapid growth does not happen at an untenably high environmental cost and infrastructure projects will play a key role in ensuring the success of ‘green growth’. Those E&C companies taking a holistic approach to building a sustainable infrastructure will have a strong competitive advantage.