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Infrastructure development in India: a systematic review
- Original Paper
- Published: 14 October 2023
- Volume 16 , article number 35 , ( 2023 )
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- A. Indira ORCID: orcid.org/0000-0003-1189-5922 1 &
- N. Chandrasekaran ORCID: orcid.org/0000-0002-0076-2019 2
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It is now well-accepted that infrastructure development is essential for the growth of any economy. Successive governments in India, both at the Union and State level have given a thrust towards increased budgetary spending on infrastructure to help economic growth. On the eve of the 75th year of independence, there is a reiteration for long-term initiatives, including focused programs for roads, railways, airports, waterways, mass transport, ports, and logistics to further boost infrastructure spending. Keeping this in mind, the authors sought to systematically review the literature on how infrastructure development has unfolded in India between the years 2000–2022. The study shows that with diverse economic growth in India, there is interest in infrastructure development aligned with public interests. Infrastructure development is contextual and location-specific. Access to infrastructure positively impacts social and economic outcomes. There is however growing concern for sustainable development with rapid urbanization.
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Source Handbook of Statistics on Indian Economy, 2021–22, Table 93
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Indira, A., Chandrasekaran, N. Infrastructure development in India: a systematic review. Lett Spat Resour Sci 16 , 35 (2023). https://doi.org/10.1007/s12076-023-00357-5
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Received : 19 June 2023
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Published : 14 October 2023
DOI : https://doi.org/10.1007/s12076-023-00357-5
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Mapping the way forward in strengthening india's robust infrastructure.
Infrastructure development is indispensable for India’s economic growth, sustainable development, and global leadership aspirations, necessitating strategic investments, initiatives, and partnerships to unlock its full potential on the world stage.
Today, India needs to customize its infrastructure development to suit its distinct requirements and obstacles, while also gleaning valuable insights and best practices from global experiences to better tackle these challenges. Moreover, considering global warming and the pressing need to decarbonize society, all nations must collaborate in crafting solutions that cater to the needs of future societies on a larger scale.
According to a recent CRISIL report, India is projected to allocate nearly Rs 143 lakh crore towards infrastructure development over seven fiscal years until 2030. This amount significantly surpasses the Rs 67 lakh crore expended during the preceding seven fiscal years from 2016-17 (FY17). Notably, approximately Rs 36.6 lakh crore of this total will be earmarked for green investments, marking a remarkable fivefold increase compared to FY17-23.
Green infrastructure is swiftly gaining traction in contemporary urban planning across all tiers of governance—national, regional, and municipal. Sustainable infrastructure will be instrumental in advancing the country's green objectives.
As the country progresses towards green infrastructure, it not only fosters a pathway to sustainable economic growth but also enhances the quality of life for its people. By aligning with global sustainability objectives, India sets the stage for a greener and more prosperous future. Through investments, innovation, and a steadfast dedication to sustainable principles, India stands ready to lead in developing green infrastructure, catalyzing its sustainable economic advancement, and serving as a beacon for the world towards a more sustainable tomorrow.
Leveraging the massive potential that awaits to be tapped in the endeavor of strengthening the country’s infrastructure further and spearheading the transformation towards a much more reliant economy, The Times Now India Infra Transformation Summit 2024 to be held on 27th June at Taj Palace, Delhi aims to be the meeting ground where innovation, progress, and collaboration converge to shape the future of India’s infrastructure landscape.
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The summit aims to bring together key stakeholders from government, industry, and academia to discuss emerging trends, challenges, and opportunities in the infrastructure sector through panel discussions, keynote speeches, and networking opportunities.
Some of the Key stakeholders (speakers) to steer the collaborative discourse ahead:
- Dr. Surendra Ahirwar, Joint Secretary, Logistics & Trade, Ministry of Commerce & Industry, PM-GatiShakti & National Logistics Infrastructure Policy, Government of India
- Roopa Mishra, IAS, Joint Secretary & National Mission Director Swachh Bharat Mission, Ministry of Housing & Urban Affairs
- Baldeo Purushartha, IAS, Joint Secretary Department of Economic Affairs, Ministry of Finance, Government of India
- Ajay Saxena, Sr. Adviser, National Investment and Infrastructure Fund (NIIF) (Renowned PPP expert)
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- Sudhir Hoshing – CEO – IRB Infrastructure Developers
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- Arun Goyal, Member, Central Electricity Regulatory Commission
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For more information on The Times Now India Infra Transformation Summit 2024, visit: https://et-edge.com/conferences/infra/
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Opinion: Charting The Course Of Infrastructure Transformation In The Modi Era
Infrastructure development plays a pivotal role in driving long-term economic growth by enhancing productivity, improving living standards, and fostering sustainable expansion. Classical and neoclassical theories highlight the importance of infrastructure in increasing the productive capacity of an economy, as efficient transportation, communication networks, and energy distribution systems reduce operational costs and enhance competitiveness. Meanwhile, endogenous growth theory emphasizes the role of infrastructure investments in promoting technological innovation and human capital development, with education and research facilities sparking innovations that propel growth. Furthermore, the new economic geography underscores infrastructure's significance in connecting remote areas with economic hubs, facilitating regional development, and ensuring more balanced economic growth across different regions.
For sustainable economic advancement, the focus should be on infrastructure projects with high multiplier effects, such as transportation networks, renewable energy sources, water and sanitation systems, digital infrastructure, and educational and health facilities. These investments not only provide immediate employment opportunities and stimulate economic demand but also lay the groundwork for future prosperity by boosting efficiency, innovation, and human capital. Such strategic infrastructure development is essential for achieving long-term economic objectives, as it not only meets immediate needs but also addresses future challenges and opportunities.
The critique of short-term, inefficient investments, illustrated by Keynes' metaphor of "digging holes and filling them up again," underscores the necessity of prioritizing projects that yield substantial and enduring economic benefits. While Keynes advocated for government spending to stimulate demand during downturns, he cautioned against wasteful expenditures. Instead, the emphasis should be on sustainable infrastructure projects that not only provide a short-term economic boost but also contribute to long-term growth by enhancing the overall productivity and competitiveness of the economy. This approach aligns with broader economic theories that stress the critical role of strategic infrastructure investment in supporting long-term development, innovation, and equitable regional growth.
This is precisely what the Narendra Modi government has done. Since Narendra Modi took office in 2014, infrastructure development has been a cornerstone of his government's economic strategy, significantly impacting India's growth trajectory. The Modi administration has prioritized large-scale infrastructure projects, including the development of highways, railways, airports, smart cities, and digital infrastructure, with the aim of enhancing connectivity, improving efficiency, and attracting investment.
By 2023, the national highway network had increased by 60% from its extent in 2014, showcasing the government's commitment to infrastructure development. Specifically, the length of national highways increased from 91,287 km in 2014 to 146,145 km by 2023. The pace of construction has been noteworthy, with the Ministry of Road Transport and Highways maintaining a construction pace of 20.78 km per day during the first seven months of the financial year 2023-24. This is part of a broader initiative to construct 12,500 km of highways within the year. For context, the annual highway construction achievements in the years leading up to 2023 included 10,237 km in 2019-20, 13,327 km in 2020-21, and 10,457 km in 2021-22. This marked increase in highway construction under the Modi government contrasts with the pace before 2014, indicating a robust focus on building infrastructure as a means to bolster economic growth and connectivity across the country.
These efforts are part of the larger Bharatmala Pariyojana, an ambitious program aimed at developing about 34,800 km of highways across India. The initiative reflects the government's strategy to improve transportation, facilitate trade, and enhance accessibility, thereby contributing to the nation's socio-economic development.
Similarly, since 2014, the Indian Railways has embarked on a transformative journey, marked by significant increases in capital expenditure and ambitious modernization efforts. The period has seen record investments in railway infrastructure, including the rollout of modern Vande Bharat Express trains, accelerated station redevelopment under the Amrit Bharat scheme, and a notable push towards electrification and track laying. The Gross Budgetary Support (GBS) for the railways saw a quantum leap in 2023-24, reaching Rs 2.4 lakh crore, highlighting the government's commitment to enhancing the rail network's capacity and efficiency. This investment is a substantial increase from previous years, demonstrating a strategic focus on leveraging the railways to drive economic growth and improve connectivity across the country.
In contrast, the period before 2014, under the UPA government, saw more modest investments in railway infrastructure. The GBS in the railway budget for 2004-05 was Rs 8,000 crore, and for 2013-14 it was Rs 29,055 crore, indicating a more conservative approach to railway development. The Modi government's approach marks a significant departure from the past, focusing not just on expanding the rail network but also on modernizing it with advanced technology and services. This includes the extensive rollout of Vande Bharat trains, which are indigenously designed semi-high speed trains, and the fast-tracking of major infrastructure projects like the redevelopment of stations and the laying of new tracks. The emphasis on modernization and high-capacity infrastructure reflects a strategic shift towards making Indian Railways a world-class transporter, ready to meet the future demands of a rapidly growing economy.
Further, the union government is also addressing the regional infrastructure development disparity. Since 2014, the Indian government has significantly increased infrastructure development in the North Eastern Region (NER), marking a substantial shift from the initiatives undertaken prior to 2014 under the UPA government. An impressive sum of Rs. 3.84 lakh crore has been allocated by 55 non-exempted Central Ministries/Departments for infrastructure projects in the NER, including Assam, leveraging at least 10% of their Gross Budgetary Support (GBS) for this purpose. This expenditure has facilitated a wide range of projects, from road construction, where 4,121 km of road projects have been completed, to the sanctioning of Rs. 19,855 crore for new rail projects, enhancing both road and rail connectivity in the region. Moreover, the telecommunications infrastructure has been bolstered with the installation of 1,358 towers covering 1,246 villages, and 1,195 projects worth Rs. 15,375 crore have been sanctioned under the schemes of MDoNER and NEC in the NER States, including Assam, from 2014-2022.
The approach contrasts starkly with the period before 2014, where infrastructure development in the NER was less pronounced and less integrated. The comprehensive and multi-modal nature of the projects initiated since 2014-encompassing road, rail, air, waterway, telecom, and power connectivity-reflects a more holistic and concerted effort to bring the NER into the mainstream of national development. The focus has not only been on enhancing connectivity but also on ensuring that these infrastructure developments are sustainable and cater to the long-term needs of the region, thus setting a new precedent for focused regional development in India.
In the power sector, India has made remarkable strides, transitioning from a power deficit to a power surplus nation. The average availability of power has significantly improved, reaching 20.5 hours in rural areas and 23.5 hours in urban areas. This achievement is poised to make generating sets and stabilizers a thing of the past. Additionally, India has become a global leader in the cost-effective production of renewable energy, boasting the cheapest renewable energy production costs worldwide. This focus on renewable energy is part of India's broader commitment to sustainable development and energy security. The nation has achieved its NDC target of having 40% of its installed electricity capacity from non-fossil fuel sources nine years ahead of schedule, in 2021. This achievement underscores India's commitment to combating climate change and transitioning towards a green economy. The rapid expansion in solar capacity, which has increased 23-fold since 2014, along with the distribution of nearly 90 lakh solar lighting systems, reflects the government's focus on harnessing solar energy to meet its power needs. Furthermore, the deployment of over 5.3 lakh solar pumps to farmers signifies a push towards sustainable agricultural practices. The reduction in solar tariffs to below Rs. 2 per unit highlights the economic viability of renewable energy, making it an attractive investment and further driving India's renewable energy sector forward. This concerted push towards renewable energy is a key component of India's infrastructure development, aligning with global sustainability goals and ensuring energy security for future generations.
Alongside the notable advancements in power and transportation infrastructure, India's focus on telecommunications and digital infrastructure has been transformative. The government's efforts have led to a drastic reduction in mobile data tariffs, from Rs 269 per GB in 2014 to Rs 10.1 per GB, making digital connectivity more accessible to a broader segment of the population. This reduction in costs has spurred a remarkable increase in data consumption, which has grown 63 times, and the number of mobile broadband subscribers has expanded more than 17 times. Such developments are pivotal in driving India's digital revolution, making information and digital services more accessible and fostering inclusive growth.
The comprehensive approach to infrastructure development under PM Modi's leadership reflects a strategic vision to transform India into a developed nation with future-ready infrastructure. This vision encompasses not just the physical infrastructure but also the digital and energy landscapes, ensuring that India's growth is sustainable, inclusive, and resilient. The government's concerted efforts in these areas are setting the foundation for a new era of prosperity and global competitiveness for India.
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Bibek Debroy is the Chairman, Economic Advisory Council to the Prime Minister (EAC-PM) & Aditya Sinha is Additional Private Secretary (Policy & Research), EAC-PM.
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Make Your Note
India’s Infrastructure Push
- 09 Feb 2023
- 13 min read
- GS Paper - 2
- GS Paper - 3
- Government Policies & Interventions
- Growth & Development
- Infrastructure
This editorial is based on “ An infrastructure push for the people ” which was published in the Hindu on 07/02/2023. It talks about India's push on infrastructure in the Union budget 2023-24 and challenges ahead.
For Prelims: Infrastructure, Capital Expenditure, Digital Divide, Physical Infrastructure, Cybersecurity, Digital and Social Infrastructure, Digital India Bhashini Portal , 5G, Internet of Things (IoT), Artificial Intelligence (AI), Quantum Computing, Mechatronics, Robotics
For Mains: Government Policies & Interventions, Growth & Development, Infrastructure
Infrastructure is universally acknowledged as a key driver of growth. The term infrastructure, however, is usually associated with physical assets, such as roads, ports, power transmission lines, etc. However, in recent years, India's growth story has been closely associated with a strong focus on not only physical, but also social and digital infrastructure.
Budget 2023 gives a powerful thrust to these three dimensions of infrastructure development which, put together, accelerate inclusive growth. The targeted investments will not only create vital physical infrastructure and improve connectivity that will accelerate the movement of passengers and freight, but also create jobs, spur private investments, and provide a cushion against global headwinds.
In Budget 2022-23, India focused on giving the necessary push to the economy by investing in various infrastructure projects. In the upcoming Budget, the infrastructure sector will receive a similar amount to reach India's goal of becoming a USD5 trillion economy by 2025.
What is the Proposed Allocation in the 2023-24 Budget?
- India’s capital expenditure as a percentage of GDP increased from 1.7% in 2014 to nearly 2.9% in 2022-23.
- For infrastructure, Rs 10 lakh crore (3.3% of GDP) was allocated in the budget 2023-24, an increase of three times from 2019.
- The Ministry of Railways received its highest-ever allocation of Rs 2.4 lakh crore, approximately nine times the allocation in 2013-14.
- The Ministry of Road Transport and Highways saw a 36% increase in its budget to about Rs 2.7 lakh crore.
- This will lead to decentralised infrastructure development in urban and peri-urban areas across regions.
- Increasing allocations to PM Awas Yojana by 66% will not only provide rural workers with housing, but also create jobs.
Why is India's Infrastructure Push Challenging?
- Land acquisition: One of the biggest challenges in building physical infrastructure is acquiring land, as it often involves resettlement of people and compensation issues.
- Funding: Funding large-scale infrastructure projects is also a major challenge, as the government may not have sufficient resources and private investment may be limited due to economic and regulatory hurdles.
- Lack of Technology : India faces challenges in terms of the availability of technology and expertise necessary for complex infrastructure projects.
- Inadequate Human Resources: The shortage of skilled workers, engineers, and managers can be a hindrance to the development of social infrastructure projects.
- Lack of Public Support: Social infrastructure projects, such as healthcare and education, require public support and buy-in, which can be difficult to secure in a complex political environment.
- Inadequate Planning and Implementation: Poor planning and implementation can result in substandard facilities and a lack of sustainability, ultimately reducing the impact of the infrastructure push.
- Digital Divide: There is a digital divide in India, with limited access to technology and the internet in rural areas, which can hinder the development of digital infrastructure.
- Cybersecurity Concerns: The increasing use of technology also raises concerns about cybersecurity and privacy, making it necessary to have strong regulations and infrastructure in place.
- Lack of standardization: The lack of standardization and coordination among different players in the digital infrastructure sector can create problems for users and limit the potential for growth and innovation.
What are the Related Initiatives taken?
- JAM trinity — Jan Dhan, Aadhaar and mobile linkages
- Digital India programme
- Development, application, and large-scale expansion of cutting-edge technologies such as 5G , Internet of Things (IoT) , Artificial Intelligence (AI) , quantum computing , mechatronics, robotics and more.
- An important domain that the government is focusing on currently is creating open AI resources.
- Digital India Bhashini portal is India’s Artificial Intelligence (AI) led language translation platform.
- The Agriculture Accelerator Fund announced in the budget will enable the Indian agricultural ecosystem (startups, businesses, and farmers) to work collaboratively and find knowledge-based and farmer-centric solutions.
- In the Union Budget 2023-24 , the government has announced a mission to eliminate Sickle cell Anaemia by 2047.
- It is the largest school feeding programme of its kind in the world, covering students enrolled in government schools from Classes 1 to 8.
- It was launched in 2015 with the aim to address sex selective abortion and the declining child sex ratio which was at 918 girls for every 1,000 boys in 2011.
- It aims to ensure integrated planning and implementation of infrastructure projects in the next four years, with focus on expediting works on the ground, saving costs and creating jobs.
- In 2022, India saw a major push in construction of highways with more than 5000 kms of National Highways constructed.
- Targeted development of highways under the Bharatmala scheme has helped in bridging of infrastructure gaps in development of economic corridors
What should be the Way Forward?
- Social infrastructure includes education and skilling, public health and nutrition, drinking water and sanitation.
- These factors contribute to a stronger and more inclusive economy and holistic development.
- The government can partner with the private sector to finance, design, construct, and operate infrastructure projects.
- The government can streamline project planning and implementation processes to ensure that projects are completed on time and within budget.
- The government can explore innovative financing solutions, such as infrastructure bonds , to mobilize additional funds for infrastructure development.
- The government can ease regulations and create a favorable environment for foreign direct investment in infrastructure development.
- Investing in workforce development programs that provide job training, apprenticeships.
- Providing access to quality education and training programs
- Supporting research and innovation in infrastructure-related fields
- Fostering partnerships between the public and private sectors to encourage investment in human capital development
- Schemes to build human capital and support infrastructure development include: Skill India , National Skill Development Corporation (NSDC) , Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
- The government can establish and enforce effective regulations to ensure the quality and safety of infrastructure projects.
- Regulations can set standards for the quality of materials, workmanship
- Regulations can also specify safety requirements, such as fire safety, evacuation plans, and accessibility standards, which must be met to ensure the safety of the public and the workers involved in the project.
- Independent inspection and testing which will help to identify any issues or problems that need to be addressed before the infrastructure is put into use.
What are the main challenges in the infrastructure sector in India and what measures can be taken to overcome them? |
UPSC Civil Services Examination, Previous Year Questions (PYQs)
Q1. With reference to ‘National Investment and Infrastructure Fund’, which of the following statements is/are correct? (2017)
- It is an organ of NITI Aayog.
- It has a corpus of `4,00,000 crore at present.
Select the correct answer using the code given below:
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
- The NIIF (National Investment and Infrastructure Fund) is overseen by the Investment Division of the Department of Economic Affairs, Ministry of Finance. Hence, statement 1 is not correct.
- The NIIF is currently managing three funds which are registered as an Alternative Investment Funds (AIFs) under the SEBI Regulations. Those three funds are Master Fund, Strategic Fund and Fund of Funds and the proposed corpus of NIIF is `40,000 crore and not 4,00,000 crore. Hence, statement 2 is not correct. Therefore, option (d) is the correct answer.
Q2. In India, the term “Public Key Infrastructure” is used in the context of (2020)
(a) Digital security infrastructure (b) Food security infrastructure (c) Health care and education infrastructure (d) Telecommunication and transportation infrastructure
- Public Key Infrastructure (PKI) is a technology for authenticating users and devices in the digital world. Under this system, one or more trusted parties digitally sign documents certifying that a particular cryptographic key belongs to a particular user or device. The key can then be used as an identity for the user in digital Networks. Therefore, option (a) is the correct answer.
Q. “Investment in infrastructure is essential for more rapid and inclusive economic growth.” Discuss in the light of India’s experience. (2021)
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