India’s infrastructure spending is expected to hit ₹143-lakh crore in the next seven fiscal years till FY30, of which almost 26 per cent or roughly around ₹36.6-lakh crore will be green investments focussed on the power and surface transport sectors.
According to Crisil Market Intelligence & Analytics, green investments will be mostly towards the power sector including development of power grid and distribution network, installation of smart metering systems and establishment of transport and hydrogen infrastructure.
Of the total projected infrastructure spend, around ₹36.6-lakh crore is expected to be green investments, a 5x rise over fiscals 2017–2023. The green space will be led by renewable energy (around ₹30.3-lakh crore), followed by transportation (₹6.3-lakh crore). The future, thus, looks exciting, greener and more sustainable, it added.
On overall investments, Crisil said the Indian economy is expected to double in the next seven years. The projections show infrastructure spend will nearly double by 2030 — from an estimated ₹66.7-lakh crore between FY17-FY23 to around ₹142.9-lakh crore between FY24-FY30. It expects the private sector to largely focus on the energy and transport sectors.
Going ahead, Crisil said the funding of infrastructure projects would be in focus, given the large amounts required across new and traditional sectors.
Availability of long-term funding (debt and equity) is expected to see a boost with greater involvement of entities like the National Investment and Infrastructure Fund, National Bank for Financing Infrastructure and Development, non-banks like Power Finance Corporation, Rural Electrification Corporation and Indian Renewable Energy Development Agency, and through infrastructure investment trust, sovereign funds and green bonds, it added.
Nevertheless, the funding needed for the future requires doubling down on efforts to monetise assets — a strategy that has shown results in the mining and power sectors, but not so much in others.
With international developers still some way from actively investing in infrastructure projects in India, impetus is needed to boost the involvement of pension funds and other institutions. This will require a stable regulatory environment for all sectors, with actions in sync with the policy intent.