June 25, 2024: A report from investment banking firm Morgan Stanley predicts a 15.3% compound annual growth rate (CAGR) in infrastructure investments, leading to a cumulative expenditure of $1.45 trillion (Rs 121.16 lakh crore) in India over the next five years. This surge is expected to significantly boost the investment rate and foster a prolonged period of high productive growth.
The report also highlights that the Prime Minister’s Gati Shakti initiative, also known as the National Master Plan for Multi-modal Connectivity, will expedite infrastructure project execution and reduce cost overruns. This initiative aims to unlock productivity gains and enhance efficiency.
The increase in infrastructure spending will have four key macroeconomic impacts: a profit surge due to increased capital expenditures (capex), enhanced macroeconomic stability, improved efficiency and productivity, and more sustained growth. The report also notes that this infrastructure growth will positively affect the equity market, benefiting enablers, developers (or asset owners), and adopters.
Infrastructure investment is projected to rise from 5.3% of GDP in the financial year 2023-24 to 6.5% of GDP by 2028-29.
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