National Council of Applied Economic Research
Opinion: Souryabrata Mohapatra and Sanjib Pohit.
Key challenges are efficient utilisation of allocated funds, timely completion of projects, and a balance between urban and rural development.
India’s ambitious vision to achieve developed nation status by 2047 hinges on a transformative journey through infrastructure development. This journey is not merely about constructing highways or erecting skyscrapers; it is about building the backbone that will support sustainable, climate-resilient, and inclusive growth. With an allocation of 3.3% of GDP for infrastructure in 2024, amounting to Rs 11.11 trillion, India is making a significant bet on its future. But is this enough to address the myriad challenges and leverage the opportunities that lie ahead?
The 2024-25 Union Budget outlines a comprehensive plan with a focus on transport and logistics, critical to the Viksit Bharat vision. The goals are lofty: a national highway grid of 2 lakh kilometres by 2025, increasing the number of airports to 220, and operationalising 23 waterways by 2030. This plan is supported by a budgetary increase from Rs 3.7 trillion in 2023 to Rs 5 trillion in 2024, signalling vast opportunities for private-sector investment through public-private partnerships (PPPs).
PPPs are already transforming India’s infrastructure landscape. From the construction of airports and ports to highways and logistics parks, private sector involvement is crucial. The PM Gatishakti National Master Plan, launched in 2021, aims to enhance multimodal connectivity across economic zones. With 15,580 projects valued at $2,388.93 billion, the plan is as ambitious as it is necessary. The National Logistics Policy further aims to develop integrated infrastructure and improve service efficiency, reducing logistics costs from 13% of GDP to the global average of 8% by 2030.
India’s infrastructure initiatives are showing promising results. The Bharatmala Pariyojana, aiming to develop 34,800 km of national highways, is in full swing. The UDAN initiative has enhanced air connectivity, launching 425 routes and revitalising 58 airports since 2016. Indian Railways has electrified 61,508 km of its broad gauge network and introduced 35 Vande Bharat Express trains, with more to come.
In ports, the Sagarmala scheme has reduced turnaround time to 0.9 days, outperforming countries like the US and Singapore. Plans are underway to increase port capacity from 2,600 million tonnes per annum (MTPA) to over 10,000 MTPA by 2047.
As India urbanises, with 40% of its population expected to live in cities by 2030, managing this growth becomes crucial. The Smart Cities Mission is pivotal, with 6,753 projects completed out of 7,991. Concurrently, rural areas are becoming increasingly connected, with 56% of new internet users by 2025 expected from these regions.
India’s infrastructure growth must be sustainable to ensure long-term prosperity. The National Infrastructure Pipeline targets completing projects worth $1.4 trillion by 2025, with 21% investment from the private sector. This includes green infrastructure, renewable energy (RE) projects, and sustainable urban mobility solutions.
Transportation, a significant contributor to greenhouse gas emissions, is a primary focus. India is adopting sustainable practices, such as constructing highways using waste plastic and integrating precast material to reduce emissions. Airports are transitioning to green energy, with the Airports Authority of India aiming for net-zero emissions by 2030.
Railways are also making strides towards sustainability, with plans to achieve net-zero emissions by 2030 through electrification and the introduction of bio-toilets in passenger coaches. Ports are increasing use of RE, with a goal of 90% by 2047, and developing green hydrogen bunkering services.
The Budget’s 11.1% increase in infrastructure spending, along with projections indicating a rise in capital expenditure to Rs 49.58 trillion by 2047, underscores the government’s vision for a prosperous India. This aligns with the goal of a $5-trillion economy by 2025.
However, the road ahead is fraught with challenges. Effective implementation, overcoming bureaucratic hurdles, and ensuring equitable growth across regions will require persistent effort and innovation. India’s success will ultimately depend on its ability to build not just infrastructure but a resilient, inclusive, and sustainable future for all citizens.
Key challenges include ensuring efficient utilisation of allocated funds, timely completion of projects, and a balance between urban and rural development. The government must also address environmental impacts, land acquisition issues, and the need for skilled labour to drive projects.
But one must ask: Are these targets achievable, or are they just another set of lofty goals?
The concept of Viksit Bharat is deeply interwoven with India’s infrastructure ambitions as laid out in the Budget. Such a transformation is not just about economic growth but also social equity, environmental sustainability, and technological advancement.
The integration of sustainable practices, digital connectivity, and private sector participation are pivotal. As India marches towards 2047, its infrastructure development will be a cornerstone of its vision for Viksit Bharat.
Is this vision achievable, or is it just another budget proposal? The numbers are promising, and the intent is clear. However, the real test will be in the execution. The momentum added by the 2024-25 Budget is a step in the right direction, but continuous effort, innovation, and collaboration will be key.
Are we ready to tackle the challenges head-on? Only time will tell, but one thing is certain: the path to Viksit Bharat is as much about vision as it is about action. And now, more than ever, India needs both.
Souryabrata Mohapatra is an associate fellow and Sanjib Pohit is Professor at NCAER. Views are personal.