India's infrastructure surge: Fueling economic growth and global investment

India has witnessed remarkable economic growth in recent decades. A recent flagship report by the World Bank found that the nation’s growth rate was the second highest among G20 countries and almost twice the average for emerging market economies.

As the nation strives to ascend the global economic hierarchy, the role of infrastructure as a sector cannot be overstated. It is the foundation upon which the country's economic, social, and environmental ambitions will be built. 

Infrastructure spending in India is expected to double to Rs 143 lakh crore in FY2024-2030 period compared to FY2017-2023, with road and railway forming bulk of the Core Infrastructure spending. This is proof that infrastructure development has been and will continue to be the bedrock of India's growth story. 

Understanding What Drives the Pulse of Connectivity 

Infrastructure and economic growth share a symbiotic relationship. Robust infrastructure networks not just reduce transportation costs but increase market access while improving the overall competitiveness of businesses. 

While projects such as the "Bharatmala" and "Sagarmala" initiatives are indicative of the government's commitment to fostering economic growth through infrastructure development, there is more to it. Being a buoyant recipient of FDI is an ambition the country is keen on – as it brings our innovative prowess and leadership on display for the world to witness. This is also what makes Make in India a priority for the Modi led government. 

The 2023 edition of the World Investment Report said that the total FDI into India soared by 10 percent, from $44.7 billion in 2021 to an impressive $49.3 billion in 2022.  A well-connected country attracts more investments, enhances export potential, and creates a conducive environment for entrepreneurship. The government is enabling various public sector undertakings to lead the way in this endeavour.

RITES Ltd, a leading PSU under the Ministry of Railways was recently classified as a Navratna CPSE (Central Public Sector Enterprise) and presents a strong case for exporting India’s expertise to the world. It is looking to shore up on exports with the segment contributing towards its revenues Q1FY25 onwards as rolling stock orders from Bangladesh and Mozambique materialise. The company was declared L1 for coach order from Bangladesh Railways – valued at close to Rs 1000 crore – while for Mozambique its order consist of locomotives.

RITES has successfully undertaken an array of projects, from designing and implementing railway systems, urban development, and infrastructure to feasibility studies and project management. The company’s expansion is not only limited to diversifying its services but also its geographical reach. Its  presence now extends to over 55 countries, making it a global player in the field of transportation and infrastructure.

Energy and Sustainability

In recent years, RITES Ltd has been involved in the planning and execution of various green mobility projects namely mass transit systems, including metro rail projects in several cities across India. These initiatives align with the government's vision for a greener and more sustainable transportation ecosystem in the country.

Sustainable infrastructure development is not just a choice but a necessity. India's energy requirements are growing, and the country is making significant strides in renewable energy generation. Building green infrastructure, investing in clean energy sources, and improving energy efficiency are essential to meet the growing demand while minimising the environmental impact. 

RITES Ltd is a good example Indian ingenuity and resilience in the field of engineering and infrastructure development. To foster sustained growth, India must prioritise infrastructure investments, adopt innovative financing models, and ensure that these projects are executed efficiently and sustainably. As the country continues to transform and modernise, the role of infrastructure as a sector will remain pivotal in shaping India's destiny, making it a land of opportunities and prosperity for all its citizens.

Dr. Abodh Kumar is Professor at Department of Economic Studies and Policy, Central University of South Bihar and a President of India awardee.