India to spend Rs 143 trillion in infrastructure by 2030, says Crisil

Green investments will also see a five-fold rise from the past seven years to Rs 36.6 trillion

India’s investments in infrastructure will rise to Rs 143 trillion between financial years 2024 and 2030, analytics firm CRISIL said on Tuesday. It will be more than twice the Rs 67 trillion spent in the past seven financial years, the rating agency said during its flagship India Infrastructure Conclave 2023 held in New Delhi on Tuesday.

CRISIL’s Managing Director and CEO Amish Mehta estimates India to be the fastest expanding large economy with an average gross domestic product growth rate of 6.7 per cent through FY31.

“Per capita income is seen rising from $2,500 to $4,500 by fiscal 2031, creating a middle-income country,” Mehta said, adding that this growth would be underpinned by massive all-round infrastructure development, with sharp focus on integrating sustainability."

Green investments are expected to reach Rs 36.6 trillion, a fivefold rise from 2017, Mehta said.

“The next phase of infrastructure development will be marked 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 execution build an attractive case for various stakeholders to accelerate investments across infrastructure sectors,” the firm said.

According to CRISIL’s assessment, prominent sectors, such as roads and power are expected to remain major contributors, while relatively nascent ones, such as electric vehicles (EVs), solar, wind, and hydrogen are expected to grow gradually.

EV share in India’s overall automobile sales is likely to reach 30 per cent by 2030. Meanwhile, EV two-wheeler sales are expected to outpace other segments by 2028.

While green investments in fuels will grow, there is a need to leverage emerging technologies such as ‘floatovoltaics’ (floating solar), offshore wind technology, and green hydrogen, the firm said.

The firm emphasised on India’s growing hydrogen sector. “The hydrogen sector is poised to attract substantial investments, estimated at Rs 1.5 trillion between FY2024 and FY2030, driven by government incentive schemes. Mandates for green hydrogen use and incentive schemes will be important here considering the cost of production of green hydrogen is twice that of fossil-based hydrogen,” it added.

Sizeable investments are required in most core infrastructure sectors, which can be met through accelerated bond market activity, greater foreign investment interest, and robust equity markets.

The firm said India’s first sovereign green bond issuance will pave the way for the development of the domestic bond market for green issuances, as global experience so far is indicating a growing appetite for them.