India’s Infrastructure Revolution

by Jul 8, 2023Business & Infrastructure0 comments

Significant investments in the infrastructure sector over the last few years are paving the way for the country’s economic growth


India is experiencing a blitz upgrade in its development, driven by growing government investment and development schemes. There is significant growth in India’s transportation networks, including roads, railways, aviation, and waterways, and their impact on India’s economic development. These infrastructure improvements aim to enhance connectivity, reduce logistics expenses, and bring India a global economic powerhouse. Fuelled by the ambitious PM Gatishakti National Masterplan for multi-modal infrastructure growth, the new roads and railways will help India fulfill its ambition to turn into a $5 trillion economy—up from $3.74 trillion currently (IMF, 2023).

Revitalizing Road Networks

India brags the world’s second-largest road network, with over 6.37 million km. In recent years, there has been substantial growth in the pace of setting up of national highways(NH), from an average of 12 km per day in 2014-15 to around 29 km per day in 2021-22. The total length of highways has expanded from 97,830 km in 2014 to 145,155 km today. Moreover, in the last nine years, more than 3.5 lakh km of rural paths have been made under the Pradhan Mantri Gram Sadak Yojana(PMGSY) giving all-weather roads connectivity to the villages. The government’s budget support for road infrastructure has rapidly increased in the year 2022-23. Completion of strategic projects like the Atal Tunnel, the Chenab River Bridge, Dhola-Sadiya Bridge, some of which had been pending for years, on a war footing is a testament to the government’s inclusive governance and its commitment to connectivity even in the remotest and rugged terrains of the country.

Revolutionizing Railways

India’s railways have undergone substantial modernization and expansion. Capital expenditure on railway infrastructure has steadily increased over the past four years, with a budget of ₹2.5 lakh crore allocated in Year 2022-23, representing a 29% rise compared to the previous year. Electrification of railway tracks has witnessed significant progress, reaching 37,011 route km in the last nine years. Further, on 4 March 2022, the successful trial of KAVACH, an advanced electronic system designed to help the Indian Railways achieve Zero Accidents was conducted. The introduction of the flair design of Vande Bharat Express, which are already functional in 23 routes, and its subsequent expansion showcases India’s commitment to high-speed rail travel. The ongoing construction of a high-speed line between Mumbai and Ahmedabad, with Japanese collaboration, and the development of new freight corridors will further boost connectivity, reduce travel time, and facilitate the efficient movement of passengers.

Aviation Sector’s UDAN

Our aviation sector has experienced substantial growth, positioning India as the world’s third-largest market. To promote regional connectivity and regenerate unserved or underserved airports, the government has allocated a budget of ₹4,500 crores under the Ude Desh ka Aam Nagarik (UDAN) scheme. The number of airports with civilian flights has doubled in the last nine years, from 74 in 2014 to 148 in 2023. The government has also said ‘in-principle’ approval for setting up 21 greenfield airports across the country. Further, the upcoming greenfield Noida International Airport will also be the largest center for aircraft maintenance, repair, and operation (MRO), bolstering the aviation sector and building employment opportunities.

Harnessing Waterways

India found the immense potential of its waterways in establishing a sustainable logistics sector. The government’s aim for inland water transport has led to the declaration of 111 National Waterways. The cargo movement on these waterways break a record high of 108.8 million tons in FY22, reflecting a growth of 30.1% compared to the last year. The Inland Vessels Bill 2021 further facilitates the increase of inland water transport, creating a robust multi-modal transport ecosystem and fostering ease of doing business. Additionally, the Sagarmala Project focuses to develop ports, reduce vessel turnaround time and streamline compliances.

Economic Implications and the Future

Transport infrastructure development boosts economic activity by minimizing transport expenses, increasing gains from trade, and driving up wages. The development of infrastructure has helped move workers from agriculture to more productive areas of jobs. Making this transition possible and feasible, also inspired improvements in educational attainment in villages.

India will be mobilized into a high-quality transport network, powered by greenfield expressways, revamped airports, electrified railways, and an EV ecosystem. The transformative power of new infrastructure is a must for the high growth that India aspires to achieve. It is a tide that will lift all the sections of our country.

According to a recent report by American Investment Bank Morgan Stanley, India has transformed itself in less than a decade due to critical policy choices like supply-side reforms, formalization of the modern economy, real estate act, digitizing social transfers, insolvency and bankruptcy reforms, flexible inflation targeting, focus on FDI, reforms in equity markets and government support for corporate profits among other measures.

The report suggests that in the coming years, there is going to be a steady increase in many macroeconomic factors of the Indian economy. India’s manufacturing capacity is expected to reach USD 1500 billion within 10 years as compared to USD 447 Billion in 2022; export market share to double to 4.5% by 2031 as compared to 2.2% in 2021; and India’s per capita income is also expected to more than double to about USD 5,200 by 2032. The report concludes that India will emerge as a key driver of global increase with New India driving a fifth of the worldwide growth through the end of the decade.

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