Indian Infrastructure Scenario

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The development of a country’s infrastructure is vital to the growth of its sectors and the overall economy. The infrastructure sector is a key driver for the Indian economy.

The increased spending in this sector has a multiplier effect on overall economic growth as it necessitates industrial growth and manufacturing. This in turn boosts aggregate demand by improving living conditions.

The infrastructure sector primarily comprises electricity, roads, telecommunications, railways, irrigation, water supply and sanitation, ports and airports, storing facilities, and oil and gas pipelines. India was ranked 44th out of 167 countries in World Bank’s Logistics Performance Index (LPI) 2018. India is ranked second in the 2019 Agility Emerging Markets Logistics Index.

Market Size
Foreign Direct Investment (FDI) received in Construction Development sector (townships, housing, built up infrastructure and construction development projects) from April 2000 to December 2019 stood at US$ 25.37 billion, according to the Department for Promotion of Industry and Internal Trade (DPIIT). The logistics sector in India is growing at a CAGR of 10.5 per cent annually and is expected to reach US$ 215 billion in 2020.

Government Initiatives
The Government of India is expected to invest highly in the infrastructure sector, mainly highways, renewable energy and urban transport. The Government of India is taking every possible initiative to boost the infrastructure sector. Announcements in Union Budget 2019-20:

India plans to spend US$ 1.4 trillion on infrastructure in the next five years.
NHAI will be able to generate revenue of Rs one lakh crore (US$ 14.31 billion) from toll and wayside amenities over the next five years.
In the Union Budget 2020-21, the Government of India has given a massive push to the infrastructure sector by allocating Rs 1,69,637 crore (US$ 24.27 billion) for the transport infrastructure.
As per Union Budget 2020-2021, Metro rail network has touched 657 KM and Ministry of Railways have been allocated Rs 72,216 crore (US$ 10.33 billion).
Communication sector allocated Rs 38,637.46 crore (US$ 5.36 billion) to development of post and telecommunications departments.
The Indian Railways received allocation under Union Budget 2020-21 at Rs 72,216 crore (US$ 10.33 billion).
Rs 3,899.9 crore (US$ 540.53 billion) to increase capacity of Green Energy Corridor Project along with wind and solar power projects.
Allocation of Rs 8,350.00 crore (US$ 1.16 billion) to boost telecom infrastructure.
Water supply to be provided to all households in 500 cities.
Allocation of Rs 888.00 crore (US$ 110.88 million) for the upgradation of state government medical colleges (PG seats) at the district hospitals and Rs 1,361.00 crore (US$ 188.63 million) for government medical colleges (UG seats) and government health institutions.
National Infrastructure Pipeline
The National Infrastructure Pipeline (NIP) is a group of social and economic infrastructure projects in India over a period of five years with a sanctioned amount of ₹103 lakh crore (US$1.4 trillion). The pipeline was first made public by the Prime Minister of India during his 2019 Independence Day speech. The Finance Minister announced that the NIP consists of 78% projects by the centre and states, and the remaining by the private sector.[2] The NIP is a pillar of government of India’s aim to become a $5 trillion economy by 2025.

Allocation of funds to various sub sectors of infrastructure is shown below.

Road Ahead
India’s national highway network is expected to cover 50,000 kilometres by 2019. National highway construction in India has increased by 20 per cent year-on-year in 2017-18. The government has suggested the investment of Rs 5,000,000 crore (US$ 750 billion) for railways infrastructure between 2018-2030.

India and Japan have joined hands for infrastructure development in India’s north-eastern states and are also setting up an India-Japan Coordination Forum for Development of North East to undertake strategic infrastructure projects in the northeast.

Smart Cities Development
Apart from the above, the Government has also established Smart Cities Mission of India to look after the development of 100 smart cities across all the states of India. This ambitious program is supposed to have a planned spend of Rs. 20.5 lakh crore by year 2023.

Real Estate Sector
Real estate which is primarily a private sector industry is expected to touch US$ 180 billion or Rs. 200 lakh crore by year 2023.

Who Will Build?
There is involvement of civil engineering expertise in each of these areas not only from the site management point of view but also in planning, designing, and even financing aspects of business. With the exponential growth in infrastructure and real estate activities, the requirement for civil engineers in construction sector is also expected to grow exponentially, not only as employees but also as employers such as contractors and concessionaires. If this demand for civil engineers is not met then ‘who will build?’ is the question that will have to ask ourselves.
This article is written by Prof. Avadhut Kshirsagar

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