Infrastructure Renaissance in India: Fueling Progress Beyond the Budget

 

Mohit Maneger Tiwari, 

II Sem

MBA (2024-26)

SIBM, Noida

Infrastructure Boost & Expansion: Budget-driven growth opportunities for businesses

 

1. Paving the Route to India's Infrastructure Leap

As rightly quoted in the words of John Heywood, "Rome was not built in a day, and neither is a great nation", economic growth, business expansion and societal prosperity require a strong fundamental infrastructure base. National investment in infrastructure represents the most profitable strategy a nation can implement, according to John F. Kennedy's words. Through Budget 2024, India received substantial funding to construct roads, rail networks, enhanced logistics solutions and smart cities, contributing to building a $5 trillion economy. The government's foundation work prompts businesses to ask themselves: "Are they ready to capture the new business possibilities created by this infrastructure expansion?"

 The government has substantially increased the economy through developmental projects such as PM Gati Shakti, the National Infrastructure Pipeline (NIP), the India Infrastructure Project Development Fund (IIPDF), and the Pradhan Mantri Gram Sadak Yojana. The government has also taken various initiatives to revive the economy via development projects, the Central Government has provided ₹1.5 lakh crore as an interest-free loan to state governments for the next 50 years to boost infrastructure development (Press Information Bureau 2024a).

 

Figure 1: Infrastructure Capex to GDP provision over the last decade (EAAA 2024)

 

 

Figure 2: Concentration of NIP (launched in 2019, target investment Rs. 111 trillion) in five major sectors (ICRA 2024)

 India, which ranked 44th in the World Bank Logistics Performance Index in 2018, has now improved to 38th in 2023 (Press Information Bureau 2024b), reflecting significant improvement in infrastructure and logistics. India aims to increase this ranking even higher to 25. Infrastructure is a general term encompassing all construction forms, such as roads, railways, airports, and housing projects. In every budget, the government attempts to invest more funds in this area. The money allocated to this sector ultimately flows into the hands of businesses and is also one of the largest employment-generating sectors. According to a report by TeamLease Services, in FY25, around 9.8 million jobs (directly and indirectly created by infrastructure projects) are expected, as reported by The Economic Times (Economic Times, 2024a).

India's infrastructure investment is expected to increase from 5.3% of GDP in FY24 to 6.5% of GDP in FY29, as per a report by Morgan Stanley (IBEF 2024). Under the "Smart Cities Mission," as many as 8,076 projects are in the pipeline, of which 7,401 projects have been successfully implemented. (Press Information Bureau 2024b) Also, Saudi Arabia will invest up to US$ 100 billion in India Smart Cities Missions with significant sectors such as energy, petrochemicals, refineries, infrastructure, agriculture, minerals, and mining. All these developments will push. Indian businesses and highly augment growth in the infrastructure sector (Economic Times, 2024b).

 

 

Figure 3: Mission Smart Cities,2025 (InsightsIAS 2024)

 

2. Constructing Prosperity for Business Revolution

2.1 Infrastructure Investment: Moulding India's Tomorrow

The infrastructure capex is estimated to grow at a CAGR of 11.4% over 2021-26, driven by water supply, transport, and urban infrastructure spending. Under the National Infrastructure Pipeline (NIP), 2,476 projects are currently under construction with an investment of $1.9 trillion, while 6,835 projects have already been completed. These projects aim to enhance the quality of life for Indian citizens under the brand name "Make in India"(IBEF 2024). India's logistics market, estimated at US$ 317.26 billion in 2024, is expected to reach US$ 484.43 billion by 2029, growing at a CAGR of 8.8% (IBEF 2024). As of August 2024, Indian Railways' freight loading capacity reached a new high of 653.22 Metric Tonnes (MT), with a target of 3,000 MT by FY 2030. In FY 2023-24, the total capacity was 1,591 MT, generating a revenue of ₹1 68 276 crore (Economic Times, 2024b).

 

 

Figure 4: Crisil Report suggesting 143 trillion investment in infrastructure in different sectors (Business Standard, 2023)

 

With projections, by 2030, this could generate more than ₹4 lakh crore in revenue.

Currently, logistics costs in India account for 14% of GDP, which the government aims to reduce to 8% in the next five years (IBEF 2024). In 2022, the Airports Authority of India (AAI) infused around $11.8 billion for airport development over the next five years under the "Ude Desh ka Aam Nagrik (UDAN)" scheme (IBEF 2024). India, which currently holds the fifth-largest metro network in the world, is set to surpass Japan and South Korea to become the third-largest metro network globally. As of 2024, 919 km of the metro network is under construction across 26 cities (IBEF 2024).

 

Under the Bharatmala Pariyojana, the Government of India aims to construct 26,000 km of roads, connecting various Economic Corridors and the Golden Quadrilateral (GQ). As of November 2024, 18,926 km have been completed (Press Information Bureau 2024b). In addition, under this project, a network of 35 Multimodal Logistics Parks (MMLPs) will be constructed at an investment of ₹46,000 crore. Once operational, these parks can process approximately 700 million metric tonnes of freight (Press Information Bureau 2024b). The shipping industry has been a significant driver of economic growth in India, with 95% of volume and 70% of value trade handled by it. India's cargo handling capacity from 800.5 million tonnes in 2014 has doubled to 1,630 million tonnes in 2024. India's International Shipment category rank has also improved by leaps and bounds from 44th in 2014 to 22nd in 2024 (Press Information Bureau 2024b). Besides this, the government of India is also concentrating on other development projects under the Public-Private Partnership (PPP) system, particularly in the power generation sector, which focuses on renewable energy by inviting private companies to establish infrastructure. The Jal Jeevan Mission is another major infrastructure push to provide clean and safe drinking water to every household in the country.

 

 3. Will Budget 2024’s Infrastructure Boom Surge and Reshape Business Opportunities?

A rising tide lifts all boats, and India's modern infrastructure expansion proves it exists. Boost in businesses and industries are seeking to create millions of new livelihood opportunities. The country stands ahead of its rivals by receiving significant investments to transform its transportation infrastructure, energy resources, and urban facilities. However, progress is not automatic. Companies need to join this transformation as infrastructure development is the essential beginning for obtaining its advantages. The question is no longer whether India’s infrastructure will progress—the question is, who will rise with it?"

 The above data speaks for itself, indicating that India, a developing nation, strongly focuses on infrastructure development to achieve its goal of becoming a $5 trillion economy. Numerous infrastructure initiatives have been successfully finished under the Public-Private Partnership (PPP) model to create earnings for governmental bodies alongside private entities.

  References

1.    Press Information Bureau. 2024a. “Press Release.” Government of India. Accessed March 15, 2025. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2098353.

2.    EAAA (Emerging Asia Advocacy Alliance). 2024. India Infrastructure: Coming of Age. https://www.eaaa.in/wp-content/uploads/2024/12/India_Infrastructure_Coming_of_Age.pdf.

3.    Press Information Bureau. 2024b. “Government Expenditure on Infrastructure.” Government of India https://pib.gov.in/PressReleasePage.aspx

4.    Economic Times, 2024a. “Infrastructure Companies Increase Hiring Due to Government Sector Focus." (https://economictimes.indiatimes.com/jobs/fresher/infra-cos-step-up-hiring-betting-on-govt-focus-on-sector/articleshow/111466696.cms?from=mdr.)

5.    IBEF (India Brand Equity Foundation), 2024. “Infrastructure Sector in India.”  https://www.ibef.org/industry/infrastructure-sector-india.

6.    Economic Times, (2024b). “Railways Achieves 653 MT Freight Loading by August of FY 2024-2025.” The Economic Times.. https://economictimes.indiatimes.com/industry/transportation/railways/railways-achieves-653-mt-freight-loading-by-august-of-fy-2024-2025-railway-board/articleshow/113103043.cms?from=mdr.

7.    Saha, Dhruvaksh. 2023. "India to Spend Rs 143 Trillion in Infrastructure by 2030, Says Crisil." Business Standard, October 17(https://www.business-standard.com/economy/news/india-to-spend-rs-143-trillion-in-infrastructure-by-2030-says-crisil-123101701027_1.html)