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India on the Cusp of Growth: Infrastructure Drivers in the Next Decade

Kishore Gurumukhi • 18/01/2023

India is at the cusp of growth with the infrastructure sector playing a significant role in economic advancement of the country. The government has been focusing on initiating policies to ensure the creation of world-class infrastructure in a timely manner. The sector acts as a catalyst for economic growth as it also promotes the growth of related sectors such as townships, housing, construction, and building development projects. The infrastructure sector in India is predicted to grow at a CAGR of 8.2% by 2027. Signifying the need for robust enhancement of the sector, the Government has also allocated INR 10 Lakh crore in the Union Budget 2022-23.

India's goal of achieving a $5 trillion economy by 2025 can be met by promoting quality and time-bound development plans. The Government of India (GoI) has launched the National Infrastructure Pipeline (NIP) along with other initiatives such as the Make in India and Production-Linked Incentives (PLI) schemes to boost the growth of the infrastructure sector. India plans to spend US$ 1.4 trillion on infrastructure through ‘National Infrastructure Pipeline’ in the next five years. A large focus of infrastructure investment has been on the transportation, power, water, irrigation, all contributing to more than 80% of overall spending. With rapid urbanization, India has witnessed tectonic changes in its environment and demographics character, bringing the focus of the government on other sectors, viz. industrial, social, etc. Needless to say, that there is a need for robust service delivery to ensure rapid economic growth, improved quality of life, and enhanced industrial competitiveness, coupled with planned and timely development of newer cities in the next decade.

Any new initiatives by the Government provide impetus to the development of large integrated projects. In the recent decades, developing nations have also recognized the creation of integrated sustainable industrial development as one of the most efficient ways to drive economic growth and create wealth to achieve broader socio-economic goals. In order to achieve holistic sustainable development, India will also have to integrate strategies to meet its commitment to achieving net-zero target by 2070 in line with the principles of the global Sustainable Development Goals.

As a new paradigm for development, Greenfield industries should be developed based on the principles of ESG to include optimal resource utilization and management, adopting state-of-the-art technology, inclusive smart growth and innovation. India’s Industrial Development Program at the National level is the most ambitious infrastructure program aimed at developing future industrial sustainable cities that can compete with the world's top manufacturing and investment hubs. This will facilitate investment, foster innovation, create job opportunities, and build best-in-class infrastructure, leading to overall socioeconomic development to meet the larger national program of “Make-In-India”. The program will contribute to accelerating economic development by stimulating employment and skill development and thereby increasing the sectors contribution to GDP.

Snapshot of some of the initiatives launched to give a stimulus and augment the envisioned economic growth.

   Funding support

ADB supported the program early last year with $250 million for the development of the National Industrial Corridor Development Program


Approved Prime Minister Gatishakti - National Master Plan for multimodal connectivity, including implementation, monitoring, and support mechanisms. 

   Large Initiatives

  • National Infrastructure Pipeline (INR 11 Lakh Crore)
  • National Monetization Pipeline (INR 6 Lakh Crore)
  • Bharatmala Pariyojana (26,000 km length of Economic Corridors)
  • Changes in the HAM and fast pace of asset monetization
  • National Logistics Policy, to provide a comprehensive initiative to improve the effectiveness of India's logistics ecosystem
  • Mega Investment Textiles Parks (MITRA) scheme to establish seven world-class infrastructure in the textile sector, amongst others. 
   Integration framework  

PM GatiShakti, a digital platform to bring together 16 ministries on a single platform for integrated planning and coordinated implementation of infrastructure connectivity projects.


Since there has been an increased attraction towards products manufactured in India, the overarching National Logistic Policy becomes crucial in supporting the logistics industry which plays a key role in the success of the new economic corridors. The policy will help in facilitating the flow of goods and enhancing industrial competitiveness - focusing on multimodal transport, digitization, and process redesign. The decision is of increasing importance as excessive transportation costs make domestic products less competitive on the global market. Though the government's goal is to provide better logistic sustainable infrastructure to accelerate exports and reduce companies’ logistics costs from 13-14% to single digits, it also positions India on par with other developed nations spending of ~9% of their GDP on logistics infrastructure.

The Ministry of Commerce and Industry stated that more than 22 million people in India depend on the logistics industry for their livelihood. Improving the sector will enable a 10% reduction in indirect logistics costs, which will result in an increase of 5 to 8% in exports.

Source: Press release, Ministry of Commerce, Gol


Finally, for India to boost economic competitiveness and emerge as a global power, there is a need to develop a modern, world-class infrastructure by integrating all stakeholders into holistic planning and execution to achieve efficiencies and synergies in large scale project execution.


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