New Delhi [India], June 23 : India's infrastructure has improved significantly in recent years, highlights a report by Morgan Stanley.
The report pointed out that historically, India's infrastructure competitiveness has been hindered by poor infrastructure. However, recent enhancements and government initiatives, such as 'Gati Shakti', show great promise for further progress.
"India's infrastructure has materially improved in recent years - and there is significant scope for further improvements through recent government initiatives like PM Gati Shakti (PMGS)," the report stated.
In the last decade, the report said that India has significantly increased its infrastructure spending, with a strong focus on scaling up and modernizing its physical assets.
The report also highlighted that when comparing infrastructure scale relative to GDP, India compares favourably to China, which is often seen as the benchmark for large-scale infrastructure development.
The several ministries of the Government of India have initiated long-term, sector-specific infrastructure plans to further improve various segments of the economy.
These include 'Bharatmala' for road development, 'Sagarmala' for port connectivity, Power for All, and the waterways development program.
According to the report, "This is at the margin helping goods move faster and at more affordable cost than in the past," illustrating the tangible benefits of these initiatives.
Looking ahead, the report projects a steady increase in India's infrastructure investment. It is expected to rise from 5.3 per cent of GDP in the fiscal year 2024 (F24) to 6.5 per cent by fiscal year 2029 (F29). This increase indicates a robust compound annual growth rate (CAGR) of 15.3 per cent, resulting in cumulative spending of USD 1.45 trillion over the next five years.
As of the current fiscal year, India's GDP is 19 per cent of China's. China has long been recognized for its heavy investments in infrastructure, providing unparalleled scale, size, and efficiency. However, the report indicates that India's physical infrastructure is not significantly lagging behind China's when considering the size of their respective economies.
While there may be visible differences in efficiency and quality, the report mentioned that India's ongoing and planned investments signify progress and potential for further development.
While India continues to develop its infrastructure, it is poised to achieve significant advancements, positioning itself favourably in the global context.
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