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Accelerating implementation of infrastructure projects - EY - India

Accelerating implementation of infrastructure projects

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The Government, on its part, has set the huge target of doubling investment in infrastructure from INR 20.5 trillion to INR 40.9 trillion during the Twelfth Plan period.

Indian infrastructure sector is going through a significant transformation. Investment in infrastructure is envisaged to be doubled to US$1 trillion during the Twelfth Five Year Plan and about half of this is targeted to be achieved through private sector investment.

The share of infrastructure investment in GDP is planned to be increased to more than 10% by the end of the Twelfth Plan. This investment, if it materializes, can propel India’s economic growth to a higher trajectory. While the overall investment in the infrastructure sector over the last five years has met the target, it has been lopsided, with the major share invested in the Telecom and the Oil & Gas sectors.

Sectoral investment planned in 12th Five Year Plan
Sectoral investment planned in 12th Five Year Plan

Infrastructure targets have not materialized as planned


Other critical infrastructure segments, including roads, railways and ports, have witnessed a shortfall in actual investments. The gap in terms of physical achievement of infrastructure projects is more perceptible than that in investment. Moreover, physical achievements have not matched the aggressive investment targets set in previous Five Year Plans.

Projects are delayed due to multiple factors, leading to time and cost overruns. Only a quarter of the total number of infrastructure projects has been commissioned on their scheduled dates in India.

Bridging this growing backlog and additional requirements will put a strain on resources. In this context, achieving the targets set in the Twelfth Plan appears to be a challenging task.

This report tries to identify the key challenges and opportunities in the three infrastructure sub-segments, including the railways, ports and roads and highways. It also suggests possible ways in which some of these issues can be addressed to help India achieve its infrastructure goals.

 


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Contacts

  • Adil Zaidi  
    Associate Director, EY
    011-4363 3230
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