India has focused heavily on the sector since the turn of the century, and the sector has contributed to the country’s current reputation as one of the fastest growing economies in the world. India's Planning Commission has projected an investment of US$ 1 trillion for the infrastructure sector during the 12th Five-Year Plan (2012-17). Foreign investment has helped the sector grow in this duration, with domestic players in the industry also making their mark abroad.
The Indian government too has played a significant role in the sector’s growth. It recently allowed 100 per cent foreign direct investment (FDI) under the automatic route for port development projects. It also plans to convert some roads into national highways and collaborate with Sudan in the field of renewable energy.
The value of total roads and bridges infrastructure in India is anticipated to grow at a compound annual growth rate (CAGR) of 17.4 per cent over FY12-17. The country’s roads and bridges infrastructure, which was valued at US$ 6.9 billion in 2009, is projected to touch US$ 19.2 billion by 2017.
Some of the Indian government’s initiatives in the infrastructure sector are summarised below:
The Union Ministry of Urban Development has asked states to offer their recommendations on areas of the country that can be turned into smart cities. The states have been asked for their inputs and the list of new cities would be finalised by end of August 2014, as per Mr Shankar Aggarwal, Secretary of the Ministry.
India and Singapore have asked their negotiators working on the Comprehensive Economic Partnership Agreement (CEPA) to have the review completed at the earliest. This was agreed to at a meeting between Mr K Shanmugam, Foreign and Law Minister, Singapore and Ms Sushma Swaraj, External Affairs Minister, Government of India.
The government has facilitated 100 per cent FDI under the automatic route for port development projects. A 10-year tax holiday has been allowed to enterprises engaged in the business of developing, maintaining and operating ports, inland waterways and inland ports.
India and Sudan have good potential for enhancing cooperation in promoting renewable energy, as per Dr Farooq Abdullah, Union Minister of New and Renewable Energy, Government of India. The Minister has also offered Indian assistance to develop renewable energy resources in Sudan.
Research from the Economist Intelligence Unit deems that infrastructure spending and the growth of India’s lower middle class will lift GDP over the coming years, and achieve 4.5 percent in 2014 and 5.7 percent by 2017.