How Infrastructure Development Initiatives Are Addressing India’s Growth and Prosperity
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Do you know how India’s infrastructure development is boosting the nation’s economic growth?
If you follow geopolitics and macroeconomics, then you might know that India is the fifth-largest economy in the world. Soon enough, it is going to become the third-biggest with a GDP of $5 trillion.
To achieve this ambitious goal, India needs to invest heavily in its infrastructure development, which is vital for its growth and prosperity.
This article highlights the following points:
The Booming Infrastructure Market: India’s Growth Engine
Mordor Intelligence estimates that the Indian infrastructure sector market will be worth USD 204.06 billion by 2024. Furthermore, it is predicted to reach USD 322.27 billion by 2029, expanding at a CAGR of 9.57% over the forecast period (2024–2029).
According to the IBEF report, urbanization, industrialization, and digitization are the primary areas boosting demand for infrastructure development in India. Further, it has also mentioned some staggering numbers that support the predicted potential growth of the Indian economy.
Infrastructure development is a top priority for the government. They’ve launched several initiatives recently. One of them is the US$ 1.3 trillion national master plan, Gati Shakti. This plan is leading the way in bringing about effective reforms in the sector. Already, it’s making significant progress.
Meanwhile, Saudi Arabia has shown interest in India’s growth. They plan to invest up to US$ 100 billion in various sectors. These include energy, petrochemicals, refineries, infrastructure, agriculture, minerals, and mining.
In the 2023-24 budget, there’s a notable increase in capital investment for infrastructure. It’s being raised by 33% to Rs. 10 lakh crore (US$ 122 billion). This investment will account for 3.3 percent of GDP. The Union Budget for the same year has allocated Rs. 2.40 lakh crore (US$ 29 billion) for the railways. This is the highest-ever outlay, about 9 times more than in 2013-14. It’s clear that infrastructure development is seen as a key driver of India’s growth and prosperity.
The infrastructure sector encompasses various sub-segments, each playing a vital role in the nation’s development. These include:
Why Does India Need Extensive Infrastructure Development?
India is a diverse country with a population of over 1.4 billion people. To cater to that large population, it has to have a well-organized infrastructure. India’s economy runs on four crucial economic pillars: IT, finance, tourism, and healthcare.
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A report published by S&P Global in 2016 stated, “India’s ambition to sustain its relatively high growth hinges on one crucial factor: infrastructure. However, the country faces a significant challenge due to its weak infrastructure, which is inadequate to meet the needs of a growing economy and population.”
Now that the government is focusing on inclusive development, economic diversification has begun on a larger scale. The main focus is on developing MSME sectors. It even aims to increase defense equipment manufacturing.
All these efforts are aimed at the following three key segments:
1.???? Economic Growth
First, infrastructure development facilitates the efficient movement of goods, attracts investments, and boosts overall economic activity. For example, better roads and railways can reduce transportation costs and time, increase trade and commerce, and create new markets and opportunities.
Similarly, reliable power and water supply can improve the productivity and competitiveness of industries and businesses. Moreover, infrastructure development can also generate employment and income for millions of people, especially in the construction and related sectors.
2.???? Social Development
Second, infrastructure development improves access to essential services like healthcare, education, and employment, contributing to social progress. For example, improved infrastructure can enable better delivery of health and education services, especially in rural and remote areas, and improve the quality and outcomes of these services.
Likewise, improved infrastructure can also create more and better job opportunities for people, especially youth and women, and reduce poverty and inequality.
3.???? Regional Growth
Third, infrastructure development can lead to balanced and inclusive growth across different regions of the country. For example, infrastructure development can bridge the gap between urban and rural areas, and between developed and underdeveloped states, by providing equal opportunities and benefits to all.
Furthermore, infrastructure development can also promote regional integration and cooperation, by connecting India with its neighboring countries and enhancing its role in the global arena.