India continues to face significant infrastructure development challenges despite extensive government efforts, according to the 2024-25 Economic Survey presented to Parliament on Friday. The survey highlights that while the union government’s capital expenditure on major infrastructure sectors has grown at a trend rate of 38.8% from FY20 to FY24, private sector participation remains limited in core sectors.
“India needs a continued step-up of infrastructure investment over the next two decades to sustain a high rate of growth,” the report emphasises. The government’s National Monetisation Pipeline (NMP) initiative has achieved transactions worth ₹3.86 lakh crore against a target of ₹4.30 lakh crore for FY22-24.
Average monthly capital expenditure declined to ₹0.60 lakh crore in Q1 FY25 from ₹0.66 lakh crore during July-November 2024. The slowdown was attributed to the model code of conduct during general elections and heavy monsoons affecting infrastructure spending, though the report notes improved recovery compared to the 2019 election period.
Sectoral performance
The Ministry of Ports and Shipping led budgetary utilisation at 76%, followed by civil aviation and railways at 69% and 67%, respectively. The Ministry of Housing and Urban Affairs showed the lowest progress at 49%.
In railways, network expansion remained stable at approximately 2,000 kilometres, with 17 new Vande Bharat train pairs and 228 coaches introduced. Safety improvements included electronic interlocking systems at 3,576 stations, with 227 added in FY25, and automatic block signalling across 720 route kilometres. The Mumbai-Ahmedabad High-Speed Rail Project reached 47.17% completion with ₹67,486 crore spent, while 96.4% of 2,843 kilometres of Dedicated Freight Corridors were commissioned by November 2024.
Urban development and housing
Housing demand is projected to reach 93 million units by 2036. India ranks 31st globally in real estate transparency, with residential sales hitting an 11-year high across multiple city tiers. Under PMAY-U 2.0, 600,000 houses were approved in FY25, with the programme having sanctioned 118 million houses since 2015, of which 89 million are completed.
Metro rail networks expanded by 62.7 kilometres, reaching 1,010 kilometres operational length nationwide, with another 980 kilometres under construction. The Smart Cities Mission has completed 7,479 projects worth ₹1.50 lakh crore out of 8,058 planned projects.
Infrastructure development
Highway construction declined to 5,853 kilometres in April-December FY25 from 6,215 kilometres in FY24. However, high-speed corridors increased from 93 kilometres in 2014 to 2,474 kilometres in 2024, while 4-lane and above National Highways expanded from 18,300 to 45,900 kilometres in the same period.
Port efficiency improved substantially, with capacity rising from 3 million tonnes per annum to 21 million tonnes per annum between FY24 and FY25 (April-November), reducing container turnaround time from 48.1 to 30.4 hours.
Power sector installed capacity grew 7.2% year-on-year to 456.7 gigawatts, adding 15,008 MW between April and November. Transformation capacity increased to 38,805 MVA from 32,961 MVA. Monsoons affected transmission line additions, dropping to 5,117 kilometres from 7,844 kilometres year-on-year. Renewable energy capacity reached 209.4 gigawatts, up from 180.8 gigawatts in December 2023, now constituting 47% of total installed capacity.
Water infrastructure
Eight states and three union territories achieved 100% coverage for piped drinking water under the Jal Jeevan Mission by November 2024. Overall coverage increased from 32.3 million (17%) in August 2019 to 153 million (79.1%) rural households.
Jagan Shah, CEO of The Infravision Foundation and former director of the National Institute of Urban Affairs, emphasised the importance of social infrastructure and public transport. “Urban unemployment is reducing significantly, which testifies to the economic salience of cities and the urgent need to accelerate urban infrastructure and service delivery,” he said.
Shah added that “managing [deregulation] effectively without jeopardising citizen welfare” would present a “creative challenge.”