After India gained independence in 1947, the Government had its hand full with several priorities, be it writing our own constitution, shaping the new democracy, rebuilding the economy throttled during the British Raj or providing sustenance to its citizens during ‘ship to mouth’ years. During this period when the country was severely short of resources, India recognised early on the necessity of building the ‘temples of modern India’ to spur its economic and scientific development.
At the time of Independence, India had total national highway of ~21,000 kilometres and a power generation capacity of about 1 GW. We have come a long way since then. Its road network is the second largest in the world and the country is third largest in power generation with a capacity of 416 GW. During the intervening years, the country witnessed several initiatives to build the economy and improve the infrastructure. A key achievement during the earlier years was the Green Revolution, which provided India@100 will be a nation that has claimed its rightful place in global order. much needed food security to the nation. While the five year plans provided guidance during the initial years and conceptualised large projects, the key thrust to national infrastructure building came in after the economic reforms were kicked off in 1991.
With the economic reforms, the country dismantled the license Raj, slashed tax rates and import duties, removed controls on prices and entry of new firms, put up several public sector units for divestment and rolled out the welcome mat to foreign investors. Instead of socialism, the guiding principles of policy since then have been liberalisation, privatisation and globalisation
These economic reforms have indeed revived the dormant animal spirit of the economy. There have been substantial changes in the Indian economy, its industry, infrastructure and most importantly its confidence in what the future holds. These reforms have also brought the private sector to participate and contribute to nation building. The economy and infrastructure changes since economic reforms have been so stark, that the period since independence can be considered as pre-liberalisation and post-liberalisation. National highways have grown from ~21,000 km in 1947 to only ~33,000 km by 1991. Since then, they have grown to ~1,45,000 km. Similarly, the power generation capacity grew to only ~64 GW by 1991. However, it has now ramped up to 416 GW, out of which more than 40% comes from renewable sources.
Private Sector Participation
On the eve of economic reforms, the public telecom monopoly had installed five million landlines in the entire country and there was a seven-year waiting list to get a new line. Today, India is the world’s second-largest telecommunication market with tele density of ~85% and also one of the world’s largest consumers of data. All this, of course, has been possible on account of significant private sector participation.
Since economic reforms, there has been an unprecedented step-up in the pace of infrastructure development in India, with a healthy mix of government and private sector spending. The investment by the private sector has been across multiple sectors including power, telecom, highways, ports, airports, water & wastewater, etc. These have been facilitated by providing a mix of partnership structures like concessions, BOT, management contracts, etc., as well as setting up various funding initiatives including viability gap funding, Indian Infrastructure Finance Company and Indian Infrastructure Project Development Fund. Telecom (~90% private sector share) and power generation (~50% private sector share) are major success stories of private sector participation in India. Private sector involvement during project development has brought in improved efficiencies and faster project commissioning.
The economic liberalisation has also brought in substantial capital expenditure in the industrial sector. These have been done to increase the production capacity, improve productivity so as to be cost competitive against global peers and strengthen the supply chain backbone. Increasing investments in new-age factories and data centres is being done to not only meet country’s own demand but also to make India a significant and reliable supplier to its partner countries.
Investment Acceleration
During the last few years, there has been an increased focus on infrastructure development in the country. The National Infrastructure Pipeline has been a unique exercise to encapsulate major infrastructure investments being planned or executed by various agencies in the country. A scheme like PM Gatishakti similarly provides national master plan for multi-modal connectivity, facilitating synchronisation of activities across different departments as well as different layers of Government in a holistic manner.
Several new schemes such as Digital India, Swachh Bharat, Make in India, Aatmanirbhar Bharat among others have been initiated to transform the economy and create a strong manufacturing backbone. With this aim, a multi-billion-dollar Production Linked Incentives scheme across sectors has also been launched.
The country is experiencing an infrastructural makeover on a scale unprecedented outside China. This will transform India by improving productivity, reducing logistics costs to enhance industries’ competitiveness, and improving the quality of life of its citizens. In the Budget for FY2024, the Central Government increased provision for infrastructure to an all-time high of ₹10 lakh Cr. At 4.5% of GDP, the planned effective capital expenditure by Central Government provides a significant push to the physical, digital and social infrastructure development of India
Road Ahead
As per OECD’s baseline projections, India would become the second-largest economy in purchasing power parity (PPP) terms by the time it celebrates its centenary. Even by market exchange, India’s GDP is expected to be around $30 trillion by 2047. With this size, it would account for ~20% of world’s GDP.
The path to $30 Trillion economy would be paved with significant capital outlay in years to come. The multi-trillion dollar investments towards improving infrastructure, building industrial capacity and decarbonising the economy would also provide large employment opportunities for future generations. The investments would be required not just for upgrading physical infrastructure but also for its social construct, be it education, healthcare, or technical skills
These investments would not only change the skyline of India but also its economy. Among these new temples of modern India, the new Parliament building constructed by Tata Projects, will continue to be an enduring symbol of India’s thriving democracy and a beacon of hope for generations to come.