NEW DELHI: India will spend nearly Rs 143 lakh crore infrastructure between the 2024 and 2030 budgets, more than twice the Rs 67 lakh crore spent in the last seven financial years from 2017, rating agency Crisil said Tuesday.
Of the total, Rs 36.6 lakh crore will be green investments, a five-fold increase over the amount spent during the 2017-2023 budgets, it added.
“India’s infrastructure spending will double to Rs 143 lakh crore between the 2024 and 2030 budgets, compared to 2017-2023,” Crisil said in its report. Infrastructure Yearbook 2023.
Crisil Ltd Managing Director and CEO Amish Mehta said the agency expects India’s gross domestic product to grow at an average of 6.7 percent in fiscal 2031, making it the fastest growing major economy.
“Per capita income will rise from US$2,500 today to US$4,500 by fiscal year 2031, creating a middle-income country,” he said, adding that this growth will be supported by large-scale infrastructure development, with a sharp focus on the integration of sustainability. .”
While releasing ‘CRISIL Infrastructure Yearbook 2023’, which contains a unique national index CRISIL InfraInvexMehta said policy interventions and a favorable investment environment have contributed to the upward trend in CRISIL InfraInvex scores across sectors.
“Four of these – roads and highways, energy transmission, renewable energy and ports – have an overall score of 7+ (out of 10), underlining the pace of reforms and developments in recent years,” he added. .
The rating agency noted that the next stage of infrastructure development will be characterized by growth in the average ticket size of projects and a significant number of mega-scale projects.
Appropriate and consistent policy and regulatory interventions and focus on timely implementation provide an attractive argument for various stakeholders to accelerate investments in infrastructure sectors, Crisil said.
The rating agency predicted that prominent sectors such as roads and energy are expected to continue to make major contributions, while relatively emerging sectors such as electric vehicles, solar, wind and hydrogen will pick up the pace.
“The share of electric cars in total car sales in India is likely to reach 30 percent by 2030.
“Two-wheeler sales are expected to surpass other segments by 2028, while demand for electric buses will be driven by state transport companies,” the report said.
According to Crisil, favorable total cost of ownership and total cost of ownership, as well as availability of two- and three-wheeler models, will support EV sales in the coming years.
It said renewable energy’s share of total capacity is estimated to grow fourfold between 2023 and 2030.
While solar will account for half of incremental non-fossil generation, Crisil says there is a growing need to leverage emerging technologies such as floatovoltaics, offshore wind technology and green hydrogen.
Noting that the hydrogen sector is poised to attract substantial investments, estimated at Rs 1.5 lakh crore between the 2024 and 2030 budgets, the rating agency said green hydrogen usage mandates and incentive schemes will be important here as the production costs of green hydrogen are twice as high. that of fossil-based hydrogen.
Crisil said India’s first green government bond issuance will pave the way for the development of the domestic bond market for green issuance.
In recent years, global experience has shown that investors are increasingly interested in green assets, leading to Indian companies seeking funds from global markets, the report said.
Of the total, Rs 36.6 lakh crore will be green investments, a five-fold increase over the amount spent during the 2017-2023 budgets, it added.
“India’s infrastructure spending will double to Rs 143 lakh crore between the 2024 and 2030 budgets, compared to 2017-2023,” Crisil said in its report. Infrastructure Yearbook 2023.
Crisil Ltd Managing Director and CEO Amish Mehta said the agency expects India’s gross domestic product to grow at an average of 6.7 percent in fiscal 2031, making it the fastest growing major economy.
“Per capita income will rise from US$2,500 today to US$4,500 by fiscal year 2031, creating a middle-income country,” he said, adding that this growth will be supported by large-scale infrastructure development, with a sharp focus on the integration of sustainability. .”
While releasing ‘CRISIL Infrastructure Yearbook 2023’, which contains a unique national index CRISIL InfraInvexMehta said policy interventions and a favorable investment environment have contributed to the upward trend in CRISIL InfraInvex scores across sectors.
“Four of these – roads and highways, energy transmission, renewable energy and ports – have an overall score of 7+ (out of 10), underlining the pace of reforms and developments in recent years,” he added. .
The rating agency noted that the next stage of infrastructure development will be characterized by growth in the average ticket size of projects and a significant number of mega-scale projects.
Appropriate and consistent policy and regulatory interventions and focus on timely implementation provide an attractive argument for various stakeholders to accelerate investments in infrastructure sectors, Crisil said.
The rating agency predicted that prominent sectors such as roads and energy are expected to continue to make major contributions, while relatively emerging sectors such as electric vehicles, solar, wind and hydrogen will pick up the pace.
“The share of electric cars in total car sales in India is likely to reach 30 percent by 2030.
“Two-wheeler sales are expected to surpass other segments by 2028, while demand for electric buses will be driven by state transport companies,” the report said.
According to Crisil, favorable total cost of ownership and total cost of ownership, as well as availability of two- and three-wheeler models, will support EV sales in the coming years.
It said renewable energy’s share of total capacity is estimated to grow fourfold between 2023 and 2030.
While solar will account for half of incremental non-fossil generation, Crisil says there is a growing need to leverage emerging technologies such as floatovoltaics, offshore wind technology and green hydrogen.
Noting that the hydrogen sector is poised to attract substantial investments, estimated at Rs 1.5 lakh crore between the 2024 and 2030 budgets, the rating agency said green hydrogen usage mandates and incentive schemes will be important here as the production costs of green hydrogen are twice as high. that of fossil-based hydrogen.
Crisil said India’s first green government bond issuance will pave the way for the development of the domestic bond market for green issuance.
In recent years, global experience has shown that investors are increasingly interested in green assets, leading to Indian companies seeking funds from global markets, the report said.
