29 March 2020


Boom time


India’s infrastructure development is slated to enter its golden era as per international consultancy firm PwC.


Even as Prime Minister Narendra Modi has been making waves in foreign capitals stretching from Tokyo to Washington DC, infrastructure experts are already predicting the continuation of the wave of infrastructure development.

The latest assessment by international consultancy firm PricewaterCoopers is that India’s infrastructure market will touch $ 6.6 trillion by 2025, which will be almost nudging 12.5 per cent of the Asia-Pacific. According to the consultant the Asia Pacific infrastructure market is slated to expand by 7-8 per cent per year over the next 10 years to reach $ 53.6 trillion by 2025 representing almost 60 per cent of the world total.

In its report 'Developing Infrastructure in Asia Pacific: Outlook, Challenges and Solutions', PwC expects growth in the Asia Pacific  region is due to be driven by favourable conditions in the most dominant economies, India and China, as well as a number of South East Asian nations. It is reported the size of the consumer base, abundance of natural resources and low cost workforce will all help to drive investment in the region in the coming decade. 

“The huge growth in infrastructure spending will be driven by key factors such as Asia’s economic growing prominence, trade competitiveness, and the current widely recognised infrastructure deficit across the emerging markets of this region.”

The report is of the view that increase in infrastructure spends in India is expected to be influenced by improvements in a number of sectors like housing, telecom, healthcare, education, transportation, among others. Some of the most significant growth is expected in the transportation and utilities sectors, where investment is due to treble as income and travel demand rises and the rapid urbanisation of India will continue apace with the country’s population increasingly congregating in cities. The population of India's urban centres is likely to expand to around 600 million by 2031, according to the UN. 

Another PwC report, 'Capital project and infrastructure spending: Outlook to 2025', has also highlighted the investment needs that will be propagated by India’s burgeoning urban population “The ongoing development of technology services sector, as well as demand from households, is likely to drive investment in telecommunications infrastructure. The population is expected to grow much faster than other countries in the region, which will further boost demand for infrastructure sectors serving households,” the report said.

The telecoms sector alone will see infrastructure rise increase to $130 billion by 2025, up from $27 billion in 2013. Recently private equity giant KKR announced that it had agreed to invest $164.2 million of structured long-term financing, with a number of co-investors, in leading Indian infrastructure development company GMR Holdings, the holding company for GMR Infrastructure. 

PwC has also forecasted that annual healthcare investments will grow around $37 billion by 2025, while education infrastructure spending will touch $18.9 billion.

“Asia is now the world’s primary growth engine, with China, India and Southeast Asia offering a very large consumer base and low-cost workforce, with high levels of natural resources,” says Manish Agarwal, Leader Capital Projects and Infrastructure, PwC India.

It appears boom time is nigh.

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