October 18, 2023: India will spend nearly Rs 143 lakh crore on infrastructure in seven fiscals through 2030, more than twice the Rs 67 lakh crore spent in the previous seven starting fiscal 2017, rating agency CRISIL said during its flagship India Infrastructure Conclave 2023 held in New Delhi on October 17.
Of the total, Rs 36.6 lakh crore will be green investments, marking a 5x rise compared with fiscals 2017-2023.
“We expect India’s gross domestic product to grow at an average 6.7% through fiscal 2031 to be the fastest-expanding large economy. Per capita income is seen rising from $2,500 now to $4,500 by fiscal 2031, creating a middle-income country. This growth will be underpinned by massive all-round infrastructure development, with sharp focus on integrating sustainability,” says Amish Mehta, managing director & CEO, Crisil.
The next phase of infrastructure development will be marked by growth in the average ticket size of projects and a significant number of mega-scale projects, Crisil said in its Infrastructure Yearbook 2023.
“Appropriate and consistent policy and regulatory interventions and focus on timely execution build an attractive case for various stakeholders to accelerate investments across infrastructure sectors,” it adds.
The yearbook provides an assessment of infrastructure funding requirements, interventions required in addressing the funding related challenges, avenues to promote green financing, with specific details of how electric vehicles (EVs), renewable energy, battery storage, and hydrogen are going to shape the future of sustainable infrastructure development.
The yearbook pegs prominent sectors such as roads and power to remain major contributors while relatively nascent ones such as EVs, solar, wind and hydrogen are touted to pick up pace.
Banks and NBFCs are in a comfortable position to further lend to the infrastructure sector following improvement in balance sheet and greater focus of sector NBFCs, points out the yearbook.
It also says that the pace of monetisation will have to accelerate.
“Continued evolution of asset monetisation models can ensure timely flow of funds and provide exits to existing investors. The government has ensured our policies respond to the needs of sectors with evolving challenges of size and changing technological landscape and business models, especially in EVs, hydrogen, and renewable energy. It is critical to have continued support for scaling up sustainable urban infrastructure, mobility solutions and emerging technologies.”
“Regulatory evolution and clarity in areas such as carbon market development, grid integration of renewable energy, Production Linked Incentive scheme for the EV value chain and energy storage will ensure we build further on the momentum already generated in these segments. Balancing growth and environment concerns, ensuring a smooth and just transition from fossil fuels, will be important, too,” it adds.
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