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2017
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Infrastructures >
Review
T
he Infrastructure sector is largely
responsible for propelling India’s
overall development.The Ministry of
Road Transport and Highways & Shipping,
has announced the government’s target of
Rs 25 trillion (US$ 376.53 billion) investment
in infrastructure over a period of three
years, which will include Rs 8 trillion
(US$ 120.49 billion) for developing 27 industrial
clusters and an additional Rs 5 trillion (US$
75.30 billion) for road, railway and port
connectivity projects.
Market Size
•
70 per cent of funds (US$ 454.83 billion)
for the next 5 years are needed for power,
roads and urban infrastructure segments.
•
The Indian power sector itself has an
investment potential of US$ 250 billion
in the next 4-5 years, providing immense
opportunities in power generation,
distribution, transmission and equipment.
•
The Indian construction equipment industry
is expected to grow to US$ 5 billion by
FY2019-20.
Major Investments Planned in India's
Infrastructure Sector
Investments
•
The Asian Development Bank (ADB) has
approved US$ 631 million loan to develop
the first coastal corridor, namely the
Vishakhapatnam-Chennai industrial corridor.
•
The Asian Development Bank (ADB)
and Government of India signed a loan
agreement of US$ 80 million, that will be
invested for improving water supply, solid
waste management and sanitation in the
cities of Agartala and Aizwal,the capital cities
of Tripura and Mizoram respectively in the
North-East part of India.
•
Maharashtra State Government plans to
launch infrastructure projects worth US$ 10.78
billion in Mumbai and neighboring areas in
2016,which include coastal road,Trans harbor
link, metro rail, airport and road projects.
•
The Government of India has earmarked
US$ 7.34 billion to develop 100 smart cities
across the country.The Government released
its list of 98 cities for the smart cities project
in August 2015.
•
The Government of India has announced
highway projects worth US$ 93 billion.
Government Initiatives
•
Plans to boost regional connectivity by
setting up 50 new airports over the next
three years.
•
Plans to invest over US$ 1.04 billion in
FY2016-17 to develop its network in the
north-eastern region for better connectivity.
•
The Reserve Bank of India (RBI) has allowed
companies in the infrastructure sector to raise
External Commercial Borrowings (ECB) with
a minimum maturity of five years.
•
The Securities and Exchange Board of India
(SEBI) has allowed Foreign Portfolio Investors
(FPI) to invest in units of real estate investment
trusts (REITs) and infrastructure investment
trusts (InvITs).
•
Government plans to use the new hybrid-
annuity model for allocating contracts under
the Public Private Partnership (PPP) projects
in highways, Namami Gange and Railway
Projects.
•
The Union Ministry of Urban Development
has approved an investment of US$ 72million
for water supply, sewerage networks and
septage management, storm water drains,
urban transport and provision of green spaces
in 13 cities over six states.
•
The Ministry of Urban Development has
approved an investment of US$ 2.81 billion
for improving basic urban infrastructure in
474 cities in 18 states and Union Territories.
•
The Government of India plans to award
100 highway projects under the public-
private partnership (PPP) mode in 2016,with
expectations that recent amendments in
regulations would revive investor sentiments
in PPP projects in the infrastructure sector.
•
The Reserve Bank of India (RBI) has notified
100 per cent foreign direct investment (FDI)
under automatic route in the construction
development sector and the Government
has relaxed FDI norms in construction.
Road Ahead
•
Indian port sector and Indian aviation are
poised to make great progress in the years
to come. It is forecasted that by the end of
2017 port traffic will amount to 943.06 MT
for India’s major ports and 815.20 MT for its
minor ports and project investment in aviation
will be US$ 120 billion.
Source:India Brand Equity Foundation,Dept.of
Commerce & Industry, Govt. of India
Investments will boost economy and increase output
photo by: © Singhlens, Dreamstime.com