Innovation and infrastructure are two key factors that drive economic progress. India’s economic growth, which reached US $26 trillion, is primarily attributed to its infrastructure. The growth of industrial infrastructure in India has also influenced the history of the global community.
India aims to achieve above 8% growth in the years to come by developing advanced infrastructure that can challenge any industrialised nation.
Infrastructure development must be considered in reaching India’s 2047 goal of a $40 trillion economy and transitioning from a developing nation to a developed one.
That said, let’s discuss the current growth of the infrastructure industry in India and what the future holds for it in the coming years. Let’s begin!
What are industry, innovation, and infrastructure?
Within an economy, industry is the process that creates goods or associated services. Innovation is a unique idea, tool, or technique. And when we talk about infrastructure, we’re talking about the essential services and facilities that a nation, city, or area needs for its economy to run smoothly.
Robust industrialisation creates opportunities for everyone. Amid a rapidly changing global economic environment, innovation and robust infrastructure are crucial to long-term prosperity.
Every flourishing community starts with a robust and functional infrastructure. We need to modernise our infrastructure and industry to address any forthcoming challenges. To do this, we must support cutting-edge, environmentally friendly technology and provide reasonable, widespread access to the financial system and information.
Prime Minister Narendra Modi recently reiterated the importance of infrastructure as a cornerstone for ensuring effective governance in every sector. The government’s emphasis on developing future infrastructure is evident from the several projects that have been introduced.
Also read: The renewable energy industry in India: A game-changer for the environment
Growth of infrastructure industry in India
To support the expansion of the infrastructure industry, the government has introduced the National Infrastructure Pipeline (NIP) along with other programmes like “Make in India” and the production-linked incentives (PLI) plan. There are now 9,142 NIP projects spanning 34 subsectors, compared to the original 6,835 projects.
In the past, financing for transportation, energy, water, and irrigation has accounted for over eighty per cent of the nation’s infrastructure investment. The government continues to prioritise these areas, but as India’s environment and demography change, the government is additionally starting to concentrate on other areas.
The major infrastructure initiatives carried out in India include:
Gati Shakti and Industrial Corridors
The Gati Shakti and Industrial Corridor, which was established in India in 2019, aims to guarantee the synchronised planning and execution of fundamental construction initiatives over four years.
The Gati Shakti programme aims to bring together under one roof all the major mobility infrastructure initiatives of different ministries and state governments, including
- Bharatmala (roads and highways),
- Sagarmala (a chain of ports),
- Waterways within the country,
- Land ports,
- Ude Desh ka Aam Nagrik (UDAN) – an array of regional and accessible airports.
Bharatmala Pariyojana
A brand-new transit route initiative called Bharatmala Pariyojana aims to maximise the effectiveness of passenger and freight transport across the nation by filling up important infrastructure gaps with well-thought-out interventions.
The ‘Bharatmala Project’ intends to build 34,800 km of national roads at an estimated cost of US$64 billion in its first phase.
India has already made significant progress in developing national roads that link all locations of travel, commerce, and freight. A budget of ₹2.81 lakh crore is allocated for the development of over 13,800 km of roadways in 2023–2024 alone, a 33% increase from the previous year.
Delhi-Mumbai Industrial Corridor
The Government of India has launched the first industrial corridor development initiative, which is the Delhi-Mumbai Industrial Corridor (DMIC). This programme has a total sanctioned value of around US$2.4 billion.
The initiative has taken on 11 industrial corridor projects, and by 2024–2025, a total of 30 projects will be constructed under it in four stages.
Moreover, together, India and Japan are collaborating to develop the infrastructure in Northeast India. They are also forming an India-Japan Coordination Forum to execute important infrastructure projects in the region.
It is clear that infrastructure development will act as a crucial catalyst for India’s high growth target in the coming years.
Also read: Maritime industry: How India’s shipping and port industry is making waves
The future of industry innovation and infrastructure in India
India has to improve its infrastructure to achieve its goal of US$5 trillion in economic development by 2025. India’s Planning Commission recommended spending $1 trillion on infrastructure throughout the 12th Five-Year Plan, with the private sector contributing 40% of the funding.
Additionally, the government has proposed spending $750 billion on strengthening the infrastructure of Indian railroads and has envisioned the Maritime India Vision 2030, which projects significant expenditures in the creation of world-class infrastructure at Indian ports.
India’s rapidly expanding population will need $840 billion in urban infrastructure investments over the following fifteen years. This amount of investment is needed if we also consider the long-term upkeep and stability of the roadways, ports, and airports.
As we step into a new era of infrastructure growth due to digitalisation, we are noticing the huge potential that Tier 2 and 3 cities might provide for economic development in the future.
Also read: The past, present, and future of the Indian agriculture industry
The top stocks in the infrastructure industry in India
If you want to take part in the growing infrastructure industry, here is a list of the top infrastructure companies on the BSE (as of January 3, 2023), ranked by market capitalisation.
| Company | Market cap (₹ cr.) | Net profit (₹ cr.) | Share price % return (1Y) as of January 3, 2023 |
| Power Mech | 7,009.73 | 209.27 | 108.88 |
| HG Infra Engineering | 5,618.08 | 421.38 | 33.7 |
| Nirlon | 3,685.83 | 157.92 | 19.98 |
| K P Energy | 1,647.24 | 43.82 | 281.71 |
| Om Infra | 1,433.48 | 33.54 | 290.04 |
Conclusion
Strong infrastructure is the key to the growth of an economy and India understands this. With all the government initiatives in place, it is fair to assume that India’s infrastructure will continue to thrive in the years to come, given that the country is well-positioned to capitalise on the infrastructure sector’s potential for growth.
