India's growth trajectory is visibly accelerating, driven by robust macroeconomic indicators and a surge in ambitious infrastructure projects across the country. Recent months have witnessed a flurry of major developments, highlighting the country’s determination to establish itself as a global economic powerhouse. Among the most notable are the inaugurations of the Parliament Complex, Atal Setu Bridge, Sela Tunnel and the Vadhavan Project by Prime Minister Narendra Modi. These state-of-the-art venues reflect India’s aspirations to become a major player in international conventions and summits, showcasing the nation’s architectural and technological prowess. On the infrastructure front, the much-anticipated Dwarka Expressway is under construction, set to become one of India's most advanced roadways, featuring the country’s longest eight-lane, shallow-depth tunnel. This marks a major milestone for the National Highway Authority of India (NHAI), which is spearheading this project as part of the broader push towards modernising the nation's road network. Infrastructure development is surging across India, with 90 significant projects worth Rs.29.41 billion launched in 11 states and Union Territories. Notable among these is the Rs.7 billion Sela Tunnel in Arunachal Pradesh, the world’s longest twin-lane tunnel located above 13,000 ft. Moreover, under the PM Gati Shakti initiative, 106 major infrastructure projects across various ministries worth Rs.11 trillion have been earmarked for fast-tracking approval. This initiative is helping accelerate the infrastructure push, enhancing connectivity and fuelling economic growth. The Government's vision extends beyond roads and tunnels. India is positioning itself as a global leader in green energy, with plans to become the primary refuelling hub for green hydrogen, ammonia and methanol in the maritime industry. This strategic initiative aligns with the country’s commitment to sustainability and renewable energy, reinforcing its position on the world stage. Amid these infrastructure developments, India's economic outlook remains strong. According to the UN’s World Economic Situation and Prospects report, the country is projected to grow by 6.9 per cent in 2024 and 6.6 per cent in 2025, positioning it as the fastest-growing major economy in the world. In times of global economic uncertainty, India’s resilience stands out, offering a beacon of hope for sustained global growth. The report card As per IMF estimates, the country’s GDP has touched the $ 3.94 trillion mark in 2024 and it is currently the fifth largest economy in the world, moving up from the 10th spot. As the Former NITI Aayog Vice Chairman, Rajiv Kumar said in a post on X, “Well done India! FY24 GDP growth comes in at 8.2 per cent well above all estimates and forecasts. This is the third year in which Indian economy has grown at 7 per cent+ outpacing all other large economies. Manufacturing and mining sectors recorded strong growth.” Despite prevailing elevated interest rates, the economy has managed to not only navigate the headwinds but also capitalise on the opportunities. The convergence of strong services growth and a revival in manufacturing underscores the concerted efforts of various sectors and policies to propel our economy forward. This momentum lays a solid foundation for sustained growth ahead. Indeed, India’s economy grew at the fastest pace in the fourth quarter at 8.2 per cent in the January-March period of FY24, which is well above the central bank’s estimate, aided by a supportive base along with a robust increase in investment. The Reserve Bank of India (RBI) estimated GDP to grow by 7 per cent in Q4 of FY24 while the National Statistical Office (NSO) put it at 7.6 per cent. Data released by the NSO showed that the high net tax growth by 19 per cent lifted growth during the quarter, followed by the construction sector increasing by 9.9 per cent, which was reflected in the housing sector doing well as well as roads. However, analysts fear rising interest rates, the election season and depressed global demand may slow economic growth for the upcoming financial year. During the March quarter, gross value added (GVA) at basic prices grew 7.2 per cent while nominal GDP was up 8.2 per cent owing to higher tax collection. This may put pressure on tax collection in FY24. On the supply side, growth in manufacturing was increasing at 9.9 per cent while mining (7.1 per cent) and agriculture (1.4 per cent) expanded at a slow pace. Though the services sector remains one of the important pillars growing at 9.4 per cent, the trade, hotels, transport and communication services segment grew at 6.4 per cent, which is understated due to a higher base effect of 12 per cent last year. Growth in private final consumption expenditure, or private spending, remains subdued, increasing by only 4 per cent in FY24. Government spending increased by a minimal 0.89 per cent in real terms, signalling that both the Centre and state governments kept their expenditure in check during the quarter despite the Centre’s capital expenditure (capex) push. However, gross fixed capital formation (GFCF), which represents investment demand in the economy, decelerated to 6.46 per cent in Q4, signalling decline in private capital expenditure. Compared to the pre-pandemic period of FY20, GFCF grew by 17 per cent. According to Chief Economic Advisor (CEA), Ministry of Finance, V Anantha Nageswaran, the Government’s capex push is paying off in terms of generating and crowding in the private sector. India’s growth rate In the preface to The Economic Survey 2023-24, Nageswaran said that while the new financial year commenced in April, by May the Indian economy had grown an impressive 8.2 per cent in real terms for FY24. “The Indian economy demonstrates resilience and stability with impressive growth figures and robust foreign investment, even as it faces challenges from global uncertainties and domestic pressures.” Overall, he said, India’s macroeconomic stability and growth prospects are its strong points and the last quarter GDP data reaffirmed these two key aspects of the Government’s overall macroeconomic management. India's economy in Q4 grew at the fastest pace in a year based on a boost in capex both at the central and state levels, along with stronger consumption demand, especially in rural areas, and improved performance in the services sector. Expansion of public digital platforms and pathbreaking measures such as the PM Gati Shakti, the National Logistics Policy and production-linked incentive (PLI) schemes will boost manufacturing output. Decline in cost overruns While efforts to enhance coordination among ministries may have helped reduce cost overruns, a significant number of major infrastructure projects still face delays. According to a May 2024 flash report by the Ministry of Statistics & Programme Implementation (MoSPI), cost overruns were reduced to 20.7 per cent of the original anticipated cost, compared to higher levels in previous years. However, the absolute cost overrun remains substantial, with an additional Rs.5.71 trillion required for more than 458 projects. The report covers infrastructure projects with expenditures of Rs.1.5 billion or more. Although there has been progress, 831 projects – approximately 45.7 per cent of the total – are experiencing delays, with an average time overrun of 35.1 months. Notably, sectors such as road transport and highways and railways report some of the largest delays and cost escalations. One of the most delayed projects, the Udhampur-Srinagar-Baramulla rail project, has faced over 20 years of delays since its approval in 1995. Initially expected to be completed by June 2024, the project's deadline has now been extended to December. Despite improvements, the report emphasises the need for further focus on reducing both time and cost overruns to ensure timely completion of critical infrastructure projects. Gati Shakti: NPG nod to 100 projects The Network Planning Group (NPG) of the PM Gati Shakti Master Plan has granted its approval for 100 projects worth about Rs.5.89 trillion, of which 40 road projects are estimated to cost Rs.3.65 trillion, 40 railway projects are worth Rs.957.04 billion and eight urban development projects account for an investment of Rs.790.16 billion. Even before the project gets clearance from the Public Investment Board (PIB) or Department of Expenditure, all infrastructure projects worth over Rs.5 billion are expected to obtain approval from NPG. The inter-ministerial NPG will evaluate infrastructure projects to ensure multimodality and comprehensive development around the project site. To date, the Ministry of Road Transport & Highways (MoRTH) has planned over 1,400 km of roads and the Ministry of Railways has planned more than 13,000 km of track length using the National Master Plan (NMP). In 2021, the Gati Shakti Master Plan was launched for coordinated planning and execution of infrastructure projects to enhance the impact of other planning for any area such as industrial corridors, urban development projects, etc. National Infrastructure Pipeline (NIP) The National Infrastructure Pipeline (NIP) is a roadmap for an investment of Rs.100 trillion in infrastructure over the next five years (2020-2025). Its aim is to make India a US$ 5 trillion economy by 2025. The NIP for FY2019-25 is a first-of-its-kind, whole-of-government exercise to provide world-class infrastructure to citizens and improve their quality of life. It aims to improve project preparation and attract investments into infrastructure. To draw up the NIP, a high-level task force was constituted under the chairmanship of the Secretary, Department of Economic Affairs (DEA), Ministry of Finance. The final NIP report for FY20-25 of the Task Force was released by Finance Minister Nirmala Sitharaman in 2020. The NIP has been made on a best-effort basis by aggregating information provided by various stakeholders, including line ministries, departments, state governments and the private sector, across infrastructure sub sectors as identified in the harmonised master list of infrastructure. All projects (greenfield or brownfield, under conceptualisation, under implementation or under development) of cost greater than Rs.1 billion per project were sought to be captured. Lack of robust infrastructure is often recognised as the primary growth constraint for a developing nation. In India, the Government is increasingly looking to the private sector for forging partnerships via effective models for co-working between the public and private sectors. The NIP is a step in that direction. To achieve seamless working and productivity in other business sectors and the ambitious goal to be a $ 5 trillion economy by 2025, strong infrastructure growth is essential. In particular, the success of India's manufacturing sector and the focus on ‘Make in India’ are directly influenced by the strength of the country’s infrastructure. There is a constant need for government intervention, solid funding and constant monitoring of projects. Growing urbanisation, increasing working-age population, shift to a services-based economy and climate change are some of the factors that will require a further boost to India's infrastructure sector and amplify the need for the NIP. The real-estate sector contributes about 6-8 per cent to the Indian GDP and is expected to contribute about 13 per cent by 2025. By 2030, it is expected to touch $ 1 trillion, becoming the third-largest globally. It is also the third-largest employer (after agriculture and manufacturing) in the country and currently employs over 50 million people. National Monetisation Pipeline (NMP) According to recent data, the Centre’s ambitious National Monetisation Pipeline (NMP) may miss the goal in FY23 by a wide margin. After achieving the target for the first year rather comfortably, it may fall short as the railways, telecom and petroleum sectors slip on their goals. The NMP assumes significance as it is an innovative way of private participation and provides a way to exploit the strength of the private sector for infrastructure creation without transfer of ownership. It helps monetise underutilised brownfield projects and creates further value for infrastructure creation in the country. The pipeline developed by NITI Aayog, in consultation with infrastructure line ministries, estimates aggregate monetisation potential of Rs.6 trillion through core assets of the Central Government, over a four-year period from FY2022 to FY2025. It aims to unlock value in brownfield projects by engaging the private sector and using funds generated for infrastructure creation across the country. The pipeline has been prepared based on inputs and consultations from respective line ministries and departments along with the assessment of total asset base available. Three key imperatives in the core asset monetisation framework: Monetisation of rights and not the ownership, assets headed back at the end of transaction life Brownfield derisked assets, stable revenue streams Structured partnerships under defined contractual frameworks with strict KPIs and performance standards. Sector-specific data and associated challengesMining sector: In the previous year, about Rs.1 trillion was raised through the monetisation route as against the target of Rs.882 billion due to the mining sector Road transport and highways: Monetisation by other sectors, including road assets by NHAI, is on track. It is expected to meet its target of Rs.328.55 billion from securitisation of toll receivables from expressways, Infrastructure Investment Trusts (InvITs) and Toll-Operate-Transfer (ToT) models Railways: Railways is the biggest component of the Rs.6 trillion NMP in the four years through FY25. It collected just Rs.8 billion via monetisation through the redevelopment of one railway station and some railway colonies in the last fiscal year as against the target of Rs.178.1 billion. According to the NMP, the railways need to monetise 120 stations, 30 trains and 1,400 km tracks, among others, in FY23. Asset monetisation should be viewed not just as a funding mechanism but an overall paradigm shift in infrastructure operations, augmentation and maintenance considering the private sector’s resource efficiencies and its ability to dynamically adapt to evolving global and economic reality. New models like InvITs and real-estate investment trusts (REITs) will enable not just financial and strategic investors but also common people to participate in this asset class, thereby opening new avenues for investment. Investment – Centre’s capex In the FY25 Union Budget, the Government has allocatedRs.11.11 trillion for capital expenditure, representing 3.4 per cent of India's GDP. This significant investment in infrastructure aims to drive economic growth, create jobs and stimulate private-sector participation. The defence sector has received Rs.6.21 trillion to continue modernisation efforts and ensure national security. The railways have been allocated Rs.2.52 trillion, focusing on the development of three economic corridors and the modernisation of 40,000 rail coaches under the PM Gati Shakti initiative, which will enhance logistical efficiency and reduce transportation costs. In agriculture, Rs.1.52 trillion has been set aside to improve productivity and introduce sustainable farming practices, including the creation of 10,000 bio-input resource centres. The healthcare sector, with an allocation of Rs.892.87 billion, will focus on extending Ayushman Bharat coverage and providing incentives for pharmaceutical production. Housing has received a substantial Rs.10 trillion under the Pradhan Mantri Awas Yojana (PMAY), aiming to build affordable homes for both urban and rural populations. Additionally, Rs.1.48 trillion has been allocated to education, employment and skill development, with plans to upgrade Industrial Training Institutes (ITIs) and provide financial assistance for higher education. These investments reflect the Government's strategy to boost sectoral resilience, foster inclusive development and position India for long-term sustainable growth. By focusing on infrastructure, housing, healthcare and education, the Budget aims to address key areas of socio-economic importance, enhance rural and urban livelihoods and attract private investments to further accelerate development. FDI inflows India received a total foreign direct investment (FDI) inflow of $ 70.95 billion in FY 2023-24, marking a 1 per cent decline from the previous year. FDI equity inflows for the same period stood at $ 44.42 billion, down 3.49 per cent from $ 46.03 billion in FY2022-23. Singapore remained the largest source of FDI, contributing $ 11.77 billion, despite a 31.55 per cent drop in inflows. Mauritius followed with $ 7.97 billion, while the US was the third-largest investor with $ 4.99 billion. The overall decline was attributed to global economic uncertainties, but certain sectors like infrastructure and construction still saw healthy growth. FDI in India is expected to pick up. This is evident from the fact that net FDI has risen to $ 6.9 billion in Q1FY2025 up from $ 4.7 billion in the same period last year. Key sectors driving these inflows include manufacturing, financial services, communication services, computer services and electricity and energy, which together accounted for approximately 80 per cent of the total gross FDI. Roads and highways India's road network is second only to the US globally. Notably, it is way ahead of China’s road network; over three times Brazil's and over four times Russia's. Here are the top 10 countries by largest road network size: Rank Country Road network length (km) 1 US 6,832,000 2 India 6,700,000 3 China 5,200,000 4 Brazil 2,000,000 5 Russia 1,538,875 6 Japan 1,218,772 7 France 1,053,215 8 Canada 1,042,300 9 Australia 873,573 10 Mexico 817,569 Little wonder then, that several road asset funds are looking towards the NHAI’s Asset Monetisation Plan (AMP). The pipeline of projects earmarked for monetisation is valued at about Rs.600 billion for FY2024-25. NHAI has identified 33 road assets, spanning 2,750 km across 12 states, for monetisation. These assets currently generate annual toll collections of Rs.49.31 billion with ICRA estimating a potential monetisation value between Rs.530 billion and Rs.600 billion. The indicative target for monetisation in FY24 stands at Rs.167.345 billion and is expected to be achieved through a combination of the TOT model and sales via NHAI's InvIT. Under the NMP, assets worth Rs.3.85 trillion have already been monetised. To reach the Government's target of Rs.6 trillion, an additional Rs.215 billion worth of assets are slated for monetisation in the coming year. Allocation for the Ministry of Road Transport and Highways (MoRTH) has seen a 2.7 per cent increase with around Rs.2.78 trillion allocated for 2024-25. As per a Crisil report, the infrastructure development landscape in India is poised for acceleration with a projected 25 per cent increase in road construction and a 33 per cent rise in renewable energy projects over the next two years. This growth is being driven by companies capitalising on asset monetisation opportunities and reducing their leverage ratios. Crisil predicts that road construction projects are set to reach up to 13,000 km annually – a notable increase from the current 10,000 km. The Hybrid Annuity Model (HAM), which was introduced in 2016, is the driving force behind this expansion. The combined capital outlay on roads, railways and the power sector in the current and next fiscals is estimated to rise to Rs.13.3 trillion, representing 3.4 per cent of the GDP as infra spend and an impressive 35 per cent growth compared to the preceding two fiscals, backed by strong execution speed. This bodes well for the economy, given the high multiplier effect of road development and the critical role renewable energy can play in achieving India’s energy transition. Further, initiatives such as Atmanirbhar Bharat as well as forbearance during the pandemic and the emergence of InvITs have provided a fillip to both sectors. However, challenges remain, such as the risk of aggressive bidding and execution by new entrants. Rationalisation in bidding will be crucial to sustain profitability and maintain quality. Timely asset monetisation will remain important in the roads sector as InvITs continue to grow. In 2014, the total road length constructed was 4,260 km, followed by a slight increase to 4,410 km in 2015. Analysts now predict that India’s road construction will grow by 5-8 per cent, reaching between 12,500 km and 13,000 km in FY2025, building on a robust 20 per cent expansion in FY2024. Despite a slowdown in project awards during FY2024 owing to the election season, MoRTH maintains a healthy project pipeline, with over 45,000 km of roads in progress as of March 2024. Supported by a strong MoRTH budget and increased activity around key economic corridors and expressways, road construction is expected to experience significant growth across various verticals. National Highways (NHs) For FY2024, India boasts 47 operational expressways, covering a total of 5,930 km, with an additional 11,127 km under construction. MoRTH is on track to meet its ambitious target of constructing 13,000 km of highways, achieving a daily run rate of 35 km by the end of the fiscal year. In June 2023, Minister Nitin Gadkari highlighted that the total length of NHs had increased from 91,287 km in 2013-14 to 146,145 km by year end 2023, and the number of four-lane highways had doubled over the past nine years. Notably, in 2020-21, lockdowns unintentionally accelerated road construction, resulting in a record 13,327 km of highways being built at a pace of 36.51 km per day. However, progress slowed in FY23, with only 4,766 km constructed out of the targeted 12,000 km. Projections for FY2025 indicate a further slowdown, with daily construction expected to decline by 7-10 per cent, bringing it down to 31 km per day, compared to 34 km in FY24. This slowdown is largely because of execution challenges, as highlighted by Care Edge Ratings. Additionally, the road transport and highways sector currently has the highest number of delayed projects, with 358 out of 769 total delayed projects, leading to significant cost escalations. In response, the Government has taken corrective actions by fast-tracking the Gati Shakti initiative. MoRTH has prioritised 235 critical road infrastructure projects for immediate monitoring and accelerated execution. With a significant portion of funding directed towards NHAI, particularly for the construction of wider highways, expressways and green corridors, the allocation increase underscores the Government’s commitment to completing more highway projects in the near term. Major boost to sector in 2024 The highway construction sector is now set to reduce its target by 22 per cent, bringing it down to 5,000 km for the current financial year. This scaling back is primarily owing to a slowdown in construction and the awarding of new projects, as the model code of conduct was in place for much of the first quarter of the fiscal year, largely due to the election season. Despite these delays, NHAI is focusing on attracting private investment in highway development through the Build-Operate-Transfer (BoT-Toll) model. It has identified 53 highway projects, valued at Rs.2.1 trillion, to be handed over to private developers, spanning a total length of approximately 5,214 km. Bids for eight of these stretches, covering 297 km, have already been invited. To make the BOT model more appealing to private developers, MoRTH has introduced a new Model Concession Agreement (MCA). Despite the slowdown in awards seen in FY24, the project pipeline remains robust, with over 45,000 km of projects in progress as in March 2024. FY2025 is poised to be a pivotal year for highway development, with a strategic emphasis on private investment through the BoT-Toll model and the new MCA, ensuring that the sector continues to drive infrastructure growth and economic recovery efforts. However, there is a challenge for the ministry after allocations are made and the maximum money goes into building and expanding highways and tunnels because a seemingly miniscule portion goes into maintenance. With an increase in the number of vehicles on roads, people have also complained that in the FASTag system of toll collection, either the cameras do not function properly or the money gets deducted twice. This ought to be a focus area addressed by the Government. Many NHs lack proper street lighting, which could lead to fatal accidents as drivers often do not believe in dipping their lights, blinding drivers coming from the opposite direction. Further, while the Government aims to achieve a daily construction rate of 45 km of highways, delays in clearances and land acquisition and increasing input costs could hinder some unprofitable road projects with unattractive traffic projections for investors. So, to give the highway sector a boost, the Government is working on rating road contractors to weed out errant contractors, which will consider the financial and contract execution performance of contractors over a five-year period. To fast-track infrastructure development, an integrated approach is being adopted to integrate portals relating to the three most important government initiatives – the PM Gati Shakti Programme, National Investment Pipeline (NIP) and Project Monitoring Group of NIP – to create a unified platform for greater scrutiny of key infrastructure projects. Government initiatives The Indian Government continues its robust push for infrastructure development in FY2024, with a variety of new initiatives and increased financial allocations designed to accelerate the country's growth and improve its physical and economic landscape. A major component of the plan is the Rs.1.5 trillion interest-free loan package for state governments, aimed at funding capex. As part of this initiative, 80 per cent of the 50-year soft loans will be disbursed based on the viability of submitted projects, ensuring that these funds support asset-creating investments such as road infrastructure, urban development and key economic corridors. Additionally, border infrastructure remains a high priority, with the Government continuing its commitment to improving logistics and connectivity in sensitive regions. The previous budget allocated Rs.310 billion to the construction of 3,508 km of roads and over 100 bridges in border areas, and similar investments are expected to continue this year to strengthen defence capabilities and regional accessibility. The Government has also focused on innovative funding mechanisms, planning to further tap capital markets to support road infrastructure projects. Small retail investors will be offered 8 per cent assured returns on their investments in road projects, facilitated through NHAI’s InvIT strategy. This will involve monetisation through the TOT model, helping expedite road construction while ensuring public participation in infrastructure development. The Government is also likely to issue green bonds in Q4 FY23. The floating of sovereign green bonds is meant to mobilise resources to create green infrastructure. MoRTH has chalked out plans to launch around 10 road and highway InvITs to bring public money into infrastructure development. The money will be raised from small retail investors with returns backed by sovereign guarantees. So far, all road sector InvITs have been private trusts. NHAI has a project bank of 20,000 km of completed roads and will be offering projects worth Rs.400 billion in the next two financial years. In a private funding initiative, Kotak Investment Advisors (KIAL) raised a Rs.60 billion infra fund to invest in operating infrastructure projects. Banks, too, are warming up to fund medium to large infrastructure projects. Bank lending to infrastructure rose to 6.5 per cent year on year in FY2024 compared to 2.3 per cent in FY2023. Banks are evaluating loan proposals of Rs.110 billion with regard to two mega infra projects: The Ganga Expressway in Uttar Pradesh and the Bandra-Versova Sea Link in Mumbai. SBI wants to downsell the Rs.110 billion loan that it has agreed to extend for Ganga Expressway and the Bandra-Versova Sea Link faces a cost escalation of Rs.67.8 billion due to deadline extensions and additional works, bringing the total cost to Rs.181.20 billion. Versova Bandra Sea Link at an estimated cost of Rs.112.33 billion is to be funded through equity of Rs.57.33 billion and term loan of Rs.55 billion. Further, the Government has come up with a new entity, a National Bank for Financing Infrastructure and Development (NaBFID), for infrastructure financing. A specialised entity created to finance infrastructure; it has been pivotal in easing access to credit for infrastructure developers. In FY2024, NaBFID is expected to disburse loans worth Rs.1 trillion towards various projects. It also provides credit enhancement and acts as a guarantor for lower-rated bonds, making it easier for small and medium-sized enterprises (SMEs) to access funding at competitive rates. The MoRTH budget for FY2024-2025 has been increased to Rs.2.78 trillion, an increase of 2.7 per cent from the previous year. This increase reflects the Government’s commitment to speeding up road and highway construction, particularly along critical economic corridors and expressways, as part of the broader vision for economic growth and national development. After all that fin talk, a little tech talk: A smart pavement with built-in sensors to monitor road and weather conditions with Wi-Fi transmitters is on the anvil. Now, wouldn’t that be something to look forward to? Railways The Railway Ministry announced plans to invest Rs.57 trillion to upgrade the sector by 2030. In FY2024-25, it decided to redevelop 1,275 railway stations under the Amrit Bharat Station Scheme, for which it received a budgetary outlay of Rs.2.41 trillion for the next fiscal. The Government is undertaking initiatives to upgrade its ageing railway infrastructure and enhance quality of service. For instance, the Rani Kamlapati Railway Station (RKMP) or Habibganj Railway Station in Bhopal is India's first world-class railway station, which has been redeveloped under the PPP model. Also, work on the 508-km Mumbai-Ahmedabad High-Speed Rail Project, also called the MAHSR Bullet Train Project, which will cover 155.76 km in Maharashtra, 4.3 km in Dadra-Nagar Haveli and 348.04 km in Gujarat, is in full swing. While presenting the Union Budget 2024-25, Finance Minister, Nirmala Sitharaman announced that the capital outlay of Rs.2.62 trillion provided for the railways, is the highest-ever allocation, nine times what it was in 2013. Overall, the Government proposed to increase capex outlay by 35 per cent to Rs.13.3 trillion, representing 3.4 per cent of the GDP. She mentioned that the railways is among the largest employers in the country and that when unemployment levels are high, the additional outlay would create jobs. In 2024-25, the railways’ capex is targeted at Rs.2.52 trillion as gross budgetary support while an extra Rs.100 billion is earmarked from extra-budgetary resources. The share of capex in the total expenditure of railways, despite low revenue surplus, has consistently been increasing in recent years. The capital railway expenditure during 2023-24 was Rs.2.60 trillion compared to Rs.2.03 trillion in 2022-23; Rs.1 trillion was invested in augmenting capacity of the network and the operating ratio during FY2023-24 was 98.65 per cent. With increased passenger expectations, the railways are planning to refurbish over 1,000 coaches of premier trains such as Rajdhani, Shatabdi, Duronto, Humsafar and Tejas. The interiors of these coaches will be improved with a modern look and for enhanced passenger comfort. For the FY 2024-2025, Rs.2.65 trillion is earmarked for capex and Rs.2.75 trillion for revenue expenditure from the total railway allocation. In this context, The Economic Survey of India said that the next 10 years would see a very high level of capex in the railway sector as capacity growth has to be accelerated so that it is ahead of demand by 2030. Up to 2014, the capex on railways was barely Rs.459.8 billion per annum and, consequently, it was characterised by high levels of inefficiency and highly congested routes, which were unable to meet growing demand. Cost of delayed projects According to the latest Infrastructure and Project Monitoring Division (IPMD) report for May 2024, 831 projects have been delayed and 554 projects remain behind schedule even after extensions were granted. As mentioned earlier, the cost escalation for these delayed projects has reached a substantial Rs.5.71 trillion, reflecting a 20.7 per cent increase over the original cost. The report, which monitors 1,817 central-sector infrastructure projects costing over Rs.1.5 billion each across 16 key sectors, highlights that the road transport and highways sector accounts for the highest number of delayed projects, with 480 projects suffering time overruns. The railways sector follows closely, with 105 delayed projects, while sectors like coal, petroleum, and power have also experienced significant time and cost overruns. In terms of cost overruns, the railways sector has the highest cost escalation at 130.32 per cent, followed by road transport and highways with a 26.92 per cent cost overrun. Cost escalation of some projects As mentioned above, the Udhampur-Srinagar-Baramulla (Jammu & Kashmir) rail project lies unfinished for over 20 years. The project’s cost was originally estimated at Rs.25 billion and revised to Rs.370.12 billion, of which Rs.360.17 billion has been spent. The Kotipalli-Narasapur (Andhra Pradesh) South Central Railways project has been delayed for 18 years. It was to benefit 3 million people. In 2000, the estimated cost was Rs.10.45 billion, which was revised to Rs.25 billion, of which Rs.113 billion has so far been spent. The Khurda Road-Bolangir (Odisha) railway project of East Coast Railways has been delayed for 17 years. Its initial cost estimate of Rs.10 billion has doubled to almost Rs.20 billion. The Lalitpur-Satna, Rewa-Singrauli line, connecting Uttar Pradesh and Madhya Pradesh, of West Central Railways has been delayed for over 16 years. About Rs.242.7 million has been spent and the new cost will be around Rs.82.48 billion. The Kothapalli-Manoharabad (Telangana) railway line of South-Central Railways has been delayed by 15 years. The original project cost of Rs.11.6 billion has escalated to Rs.30.14 billion. Aviation India is currently the seventh-largest civil aviation market in the world and is expected to become the third-largest within the next 10 years. Domestic air traffic is expected to reach around 97 per cent of the pre-COVID level. The Airports Authority of India (AAI) has laid out a capital outlay of Rs.980 billion to meet air traffic demands, embrace sustainability, construct greenfield airports, develop new terminals, bolster existing terminals and strengthen runways, among other crucial projects. In the past eight years, the number of operational airports in the country has risen from 50 in 2000 to 153 in 2023, according to the May 2024 India Brand Equity Foundation (IBEF) aviation industry report. Further, a target of having 220 operating airports has been planned by 2025. Growth of the aviation segment has been driven by a combination of factors, including liberalisation of the sector, increased competition and government initiatives to boost air connectivity. The Government is proactively supporting the sector by providing a stable policy environment and incentivising competition-led growth. It has approved the ‘Revival of Unserved and Underserved Airports’ scheme for revival and development of 100 unserved and underserved airports, helipads and water aerodromes by 2024. The Krishi Udan 2.0 scheme focuses on transporting perishable food products from hilly areas, northeastern states, tribal areas and other areas. Under this scheme, 58 airports have been identified to incentivise air cargo movement. Further, the Union Budget 2024-25 allocated Rs.5.02 billion for the regional connectivity scheme (RCS), Ude Desh ka Aam Nagrik (UDAN), in 2016. The Ministry of Civil Aviation (MoCA) had launched this scheme to enhance regional air connectivity and make air travel more affordable. As part of the scheme, 479 UDAN routes involving 74 airports, heliports and water aerodromes have been operationalised across the country with plans to reach a target of 1,000 routes and reviving or developing 100 unserved and underserved airports, heliports and water aerodromes by 2024. While an increase in air traffic has raised the demand for aircraft, it poses a problem of modernising airport and air navigation infrastructure to ensure safe operations. Also, access to aviation is still a dream for poor and lower middle-class sections of the population, which could be perceived as untapped potential for growth. An essential focus for airports is transitioning to sustainable practices. Currently, 55 airports, including 49 managed by AAI, operate on 100 per cent green energy, with efforts underway to implement carbon mitigation measures and develop carbon management plans. Airport operators are encouraged to aim for carbon neutrality and net-zero emissions. AAI has optimised airspace utilisation through the flexible use of airspace (FUA) initiative, leading to reduced CO2 emissions. MoCA is collaborating with the International Civil Aviation Organisation (ICAO) and adhering to principles of the UN Framework Convention on Climate Change (UNFCCC) to achieve sustainable aviation. Part of the strategy involves advising stakeholders to work towards carbon neutrality and net-zero emissions. To reduce aviation emissions and their environmental impact, airlines are optimising speed and flap management and aircraft weight reduction and adopting practices to prevent moisture and dirt accumulation on aircraft. To enhance airport security infrastructure, advanced technologies like explosive detection systems, full body scanners and perimeter intrusion detection systems are being implemented. Regular training is being provided to security personnel, ensuring a secure and seamless travel experience for passengers. Overall, these initiatives aim to meet growing air traffic demands while ensuring safety, sustainability and affordability in the aviation sector. The Government's focus on these measures will bolster India's aviation industry and benefit the nation's economy and passengers alike. Looking ahead: The sky’s the limit The National Civil Aviation Policy is another initiative aimed at promoting growth in the aviation sector by providing incentives for development of airport infrastructure, reducing taxes and simplifying regulations. With up to 100 per cent FDI permitted in greenfield and existing airport projects and for maintenance and repair organisations (MRO) under the automatic route, India is attracting investors to the sector. Launching new airlines can cause an aviation boom in the country as it will lead to an increase in the number of flights, lower prices and more demand for ground staff and trained crew, including a rise in finance and leasing activities. The Indian aviation space offers promising opportunities in aircraft manufacturing, airport infrastructure, airport and ground support equipment, MRO facilities, ground-handling services, trained manpower, air cargo, fuel hedging, etc. Looking ahead, the future of the Indian aviation industry is bright. The sector is expected to see significant growth in coming years, particularly in international travel and cargo. The Government's efforts to boost air connectivity and infrastructure development are expected to further drive growth. Additionally, technological advancements such as the use of artificial intelligence (AI) and automation are expected to bring greater efficiency and cost savings to the industry. Ports Ports in India handle about 95 per cent (by volume) and 68 per cent (by value) of India's external trade. India is 18th in the world's shipping tonnage, one of the world's top five ship recycling countries, and holds a 30 per cent share in the global ship recycling market. Capacity at the 12 major ports increased from 581 million metric tonne (mmt) in 2015 to 819.4 mmt in FY2024, up by 41 per cent. Likewise, for Indian ports as a whole, capacity has gone up from about 1,560 mmt in 2015 to over 2,600 mmt, boosting cargo-handling capacity. According to Sarbananda Sonowal, Union Minister for Ports, Shipping and Waterways, the country's total port capacity will increase from the existing 2,600 million tonne per annum (mtpa) to over 10,000 mtpa in 2047. This should be viewed in the context of the fact that the global port infrastructure market size was accounted for at $ 163.72 billion in 2023 and is expected to reach around $ 249.49 billion by 2032. However, most Indian ports lack the necessary machinery to handle large volumes. Further, many lack adequate IT systems, facilities and navigational aids. The main issue with regulations is that they place different jurisdictions on major and non-major ports. Lack of automation and digitalisation of port operations affects the efficiency and competitiveness of Indian ports in the global market. Automating port terminals has many potential benefits, including increased efficiency and productivity, reduced costs and improved safety. However, there are also potential drawbacks, such as the need for significant investment upfront and the possibility of job losses. In this context, the flagship Sagarmala government project aims to modernise ports and their hinterland connectivity. It focuses on developing new infrastructure, enhancing existing infrastructure and connecting ports to the hinterland through road, rail and waterways. Some key technologies used in ports, such as AI, Internet of Things (IoT), robotics, automation and cloud computing, allow ports to operate more efficiently and improve their capacity to manage large volumes of cargo. Incidentally, in a move to reduce its carbon footprint, Kolkata’s Haldia port has become the first ‘green port’ in the country after a biodiesel dispensing unit was installed. It will start using biodiesel to run its railway engines, trucks and other vehicles. Advantage: Indian ports In terms of advantages, the Indian coastline is more than 7,516.6 km long, interspersed with over 200 ports. Also, most cargo ships that sail between East Asia and America, Europe and Africa pass through Indian territorial waters. Ports in India are driven by high growth in external trade and from April-March 2024, all key ports in India handled 819.227 million tonne (mt) of cargo traffic. On March 15, 2024, The Ministry of Ports, Shipping and Waterways (MoPSW) approved Rs 6.45 billion ($ 77.79 million) for 10 new waterways projects on the Brahmaputra in Assam, enhancing connectivity, boosting river tourism and facilitating public commute, all under the Sagarmala programme In the Union Budget 2024, MoPSW received an allocation of Rs.23.46 billion, a 5.72 per cent increase compared to the previous year. Key initiatives include a significant push towards achieving top global rankings in ship tonnage and shipbuilding by 2047, as part of the Maritime Amrit Kaal Vision (MAKV) 2047 targets. The budget also allocates Rs.7 billion for the Sagarmala programme, which focuses on infrastructure development and boosting the shipping industry. Other critical measures include a Rs.1 billion fund to support shipbuilding and research, along with initiatives aimed at promoting cruise tourism, job creation and enhancing India's maritime capabilities. Additionally, the India ship recycling industry is expected to record a revenue growth of about 15 per cent this fiscal after two years of decline of 22 per cent in fiscal 2024 and 8.5 per cent in fiscal 2023, as per a report by Crisil Ratings. With rising technological advancements, ports of the future will be almost entirely, if not completely, automated. AI, advanced analytics, dynamic scheduling and pricing, predictive maintenance, self-driving vehicles and the blockchain will be among the key technological drivers of this change. Two ports India could look to for inspiration are Rotterdam (the world's smartest port) and Shanghai (the busiest container port in the world that handles over 40 million TEU annually). It would be worthwhile to mention that the Government is actively pursuing the goal of establishing India as the primary refuelling hub for green hydrogen, ammonia and methanol in the maritime industry. According to RK Singh, Union Minister for Power, New and Renewable Energy, the country has the potential to be one of the biggest manufacturers of green hydrogen in the world. Real estate Reports indicate that the Indian real-estate market will account for about 18-20 per cent of the country's GDP by 2030. Further, it is expected to continue to grow throughout the decade and surpass $ 1 trillion in market value by 2030. Owing to the rise in consumer purchasing capacity, the demand of real estate for several data centres is expected to increase to about 15-18 million sq ft by 2025. Also, the real-estate market is expected to have a CAGR of 9.2 per cent during the five-year period from 2023 to 2028. As per the Former Housing and Urban Affairs Minister, Hardeep Singh Puri, the real estate market in India is expected to contribute about 15 percent to India’s GDP by 2025 and reach a $1 trillion market by 2030. As of the fiscal year 2019-2020, NRIs accounted for about 10 percent of the total investments in the market. This figure has now grown to about 15 percent and is projected to be at 20 percent by the end of 2025. This is a clear indication of the market’s global appeal and the trust it has garnered from the NRI community. India’s promise of affordable housing remains solid with effective government initiatives and programs. These steps help the sector a lot, as over 50 percent of Indian household savings are invested in real estate. The relationship between infrastructure development and the real estate sector is highly synergistic. For instance, the upcoming Noida International Airport is driving significant real estate activity in nearby areas like Greater Noida and Yamuna Expressway, spurring new residential, commercial and retail developments. Similarly, infrastructure projects in Navi Mumbai, including the new airport and metro line, are expected to push property prices upward. With connectivity projects such as the Delhi-Mumbai Industrial Corridor and Bharatmala, real estate demand is set to rise, particularly in tier-2 and tier-3 cities, attracting major developers to these emerging markets. Based on reports published by several real-estate research firms that compared returns from the nine biggest cities in India, the average 10-year return on real-estate investment has been 10 per cent. However, the rates may vary if you look at specific cities. Factors that pose significant challenges to real-estate developers and potential homebuyers include escalating construction costs, land prices and property taxes. Affordability concerns can limit access to housing and impact the overall market. That said, the real-estate market is showing a robust performance in the second quarter of 2023, with sales maintaining momentum as new supply continues to pour in. Remarkably, even with the influx of new properties, prices in primary economic hotspots are skyrocketing. Housing As of 10th June 2024, Pradhan Mantri Awas Yojana-Urban (PMAY-U) has made significant progress in its goal of providing affordable housing. The scheme has sanctioned a total of 11.8 million houses, 11.4 million houses have been grounded for construction, and 8.367 million houses have been completed. In terms of financial progress, PMAY-U has committed Rs 1996.52 billion out of which Rs 1639.26 billion has been released. The expenditure stands at Rs 1512.46 billion. Additionally, 1.6 million houses are being constructed using new technologies, showcasing the program's adoption of modern and sustainable construction practices. This comprehensive progress reflects PMAY-U's robust implementation and its impact on urban housing development in India. Under the Pradhan Mantri Awas Yojana - Gramin (PMAY-G), the Government has set an ambitious target to build 29.5 million houses. As of 12 June 2024, 29.4 million houses have been sanctioned, and 26.2 million houses have been completed, significantly improving the living conditions of millions of rural families. A significant 17.5 million houses, accounting for 68 percent of the total, were completed within 10 months, 2.457 million houses, representing 10 percent were finished within 10 to 12 months, 4.55 million houses (18 percent) were completed in 1 to 2 years, while only 461,000 houses (2 percent) took over 3 years to be completed. This swift execution highlights the effectiveness and commitment of the PMAY-G in improving housing conditions for rural populations. Sustainability In terms of sustainability, a recent Deloitte report indicates that the construction sector accounts for 37 per cent of global CO2 emissions, of which 16 per cent represent embodied carbon, that is carbon dioxide coming from material sourcing and manufacturing, logistics and construction activities. This makes the construction industry one of the biggest single sectors to contribute to global warming and, therefore, vital for decarbonising. Emissions from production of construction materials, construction activities and logistics (embodied carbon) accounted for 5.4 gigatonne of carbon dioxide in 2020 (16 per cent of all global CO2 emissions). If business continues as usual, these emissions are forecast to remain significant beyond 2050. Geographically, construction emissions are highest in countries such as China and India, where economies are rapidly developing and therefore construction volumes are higher. Corporate Sustainability Reporting emerges as a crucial tool in holding corporations accountable and fostering tangible progress towards sustainability goals. In 2021, the Securities and Exchange Board of India (SEBI) took a significant step by revising the Sustainability Reporting framework, encompassing Environment, Social, and Governance (ESG) parameters, through the Business Responsibility and Sustainability Report (BRSR) provision. Currently, the obligation to report under BRSR is imposed solely on the top 1,000 listed companies in India. In 2023, SEBI introduced new disclosure requirements known as BRSR Core, which are updates to the BRSR regime implemented in 2021. These requirements apply to the top 150 listed companies starting from April 1, 2023. It also mandates to offer “reasonable assurance” on Environmental, Social, and Governance (ESG) metrics. Furthermore, starting from April 2024, supply chain ESG disclosure will be mandatory for the top 250 listed companies, with an option for explanation if compliance is not feasible. However, beyond this elite group, participation in sustainability reporting remains voluntary. Roadmap: The $ 5 Trillion Economy According to an analysis conducted by PHD Chamber of Commerce and Industry (PHDCCI) titled Emerging Growth Dynamics of the Indian Economy, the economy will cross $ 4 trillion in 2024-25 and the per-capita nominal GDP will cross $ 2,800. India’s economy has garnered praise from global agencies and organisations, affirmed Saurab Sanyal, Independent Director, Adviser in Chief, BSIS and Strategic leader Army Veteran, Dynamic Drilling & Services. What’s more, the country’s technological advancements, including the UPI credit scheme, are being adopted by developed economies like Japan and Singapore. Dr SP Sharma, Chief Economist, DSG, PHDCCI, added, “Projections indicate India’s continued outperformance of China, with an estimated growth rate of 6.1 per cent over the next five years.” Experts speak IMF Chief Economist, Pierre-Olivier Gourinchas recently highlighted the country’s economy as a “bright spot” in the global economic landscape. He emphasised that India, along with other emerging markets in Asia, remains a key driver of global growth. The IMF has projected India's GDP growth at 7 per cent for FY2024-25, an upward revision owing to stronger-than-expected private consumption, particularly in rural areas. Manpreet Juneja, Senior Economist, Infrastructure Specialist, World Bank agreed that India is recognised as a major player in the global economy with fast-growth projections. Analysing the country’s growth dynamics through the lens of infrastructure, he said the country is addressing past weaknesses by increasing infrastructure investments, transitioning to renewable energy and attracting private investment. India’s services sector, particularly IT, drives export growth. So, what is the Government’s roadmap to make India a $ 5 trillion economy? Pankaj Chaudhary, Minister of State, Finance, has listed measures such as focusing on inclusive growth, promoting the digital economy, fintech, technology-enabled development, energy transition and climate action, and a cycle of investment and growth. According to him, major reforms like Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), a significant reduction in corporate tax rate, Make in India, Start-up India strategies and PLIs, among others, have jumpstarted growth, and the Union Budget 2023-24 has taken further steps to sustain this high growth, including a substantial increase in capital investment outlay for the third year in a row by 35 per cent to Rs.11.1 trillion 3.4 per cent of GDP). He said the Government has focussed on a capex-led growth strategy to support economic growth and attract private-sector investment, increasing its capital investment outlay substantially in the past three years. The Government’s capital expenditure has increased from 2.15 per cent of GDP in 2020-21 to 3.4 per cent of GDP in 2024-25. It has budgeted Rs.15.01 trillion, (4.6 per cent of GDP) for ‘effective capital expenditure’ in 2024-25; this strong push is bound to attract private investment and propel economic growth. Indeed, according to the IMF's World Economic Outlook, the size of the Indian economy will increase from $ 3.2 trillion in 2021-22 to $ 3.9 trillion in 2024-25 and cross $ 5 trillion in 2027-28. Factors contributing to economic growth PM Gati Shakti National Infrastructure Pipeline National Monetisation Pipeline Transportation: Roads, metro rail Direct Benefit Transfer FDI India Stack Aadhaar UPI Technology: Space, IT, AI, construction equipment manufactured in India, housing technology, modular construction, digital twin/BIM Manufacturing: PLI schemes, chips, electric vehicles, battery storage Real estate: Housing, warehousing and logistics, data centres, shopping centres, commercial complexes Exotic to economy The earlier world perception of India was an exotic land of snake charmers but in the coming future, it will clearly be known for its economy! The country’s GDP is currently around $ 3.9 trillion but a Deutsche Bank report believes it could double to $ 7 trillion by 2030. Further, a growing chorus of analysts at banks, including Goldman Sachs, Morgan Stanley and Standard Chartered, now predict that in the next 10 years and beyond, India's GDP will grow even faster than China's. In fact, Goldman Sachs has predicted that by 2075, India will be the world’s second-largest economy, overtaking the US by a slim margin. According to Michael Patra, Deputy Governor, RBI, India will be a $ 5 trillion economy and the third largest in the world by market exchange rates by 2027, aided by the demographic advantage and pace of financial-sector development. He believes that in the next two decades, the global economy’s centre of gravity will shift eastward to Asia. He added that in terms of market exchange rates, India is the fifth-largest economy in the world and the third-largest on the basis of purchasing power parity. As for our foreign exchange reserves, he said they will become our national safety net and protect our financial markets and institutions from global spillovers. What’s more, IMF's regional economic outlook for the Asia Pacific indicates that India will account for a sixth of world output growth in 2024. India's rise to the world's second-biggest economy: The ‘how’ Currently, the US is the world’s largest economy with $ 28 trillion, according to World Bank data, while India comes in fifth at $ 3.9 trillion. How do we get to second? The answer comes from Santanu Sengupta, Goldman Sachs Research’s India economist, who says that as India’s population of 1.4 billion people becomes the world’s largest, its GDP is forecast to expand dramatically. The country will then have the world’s second-largest economy by 2075. However, the key to realising India’s potential lies in providing training and skills to its immense pool of talent. Over the next two decades, the dependency ratio of India, between its working-age population and the number of children and elderly, will be one of the lowest among regional economies. This, he believes, is the window for the country to get it right in terms of continuing to grow services and the rapid pace of infrastructure. Here are some defining factors: Demographics: In India, the dependency ratio, the non-working-age population dependent on the working-age population, will be among the lowest among large economies for the next 20 years or so. In stark contrast with India, as a result of its one-child policy, China has become one of the fastest-ageing societies in the world and its dependency ratio will keep rising for the next 30 years while India's will keep declining. These twin trends will lead to a slowdown in China's growth rate and a rise in India's. Finally, favourable demographics will add to potential growth over the forecast horizon. India’s large population is clearly an opportunity; however, the challenge is using the labour force productively by increasing its participation rate. A large section of India’s population believes in domestic savings and investment which, apart from capital investment, is a major driver of growth. With its favourable demographics, India’s savings rate may increase with falling dependency ratios, rising incomes and deeper financial-sector development, which may increase the pool of capital available and drive further investment. Decline of poverty: India's emergence as a superpower will pull hundreds of millions of people out of poverty. Poverty rates are expected to decline in Indonesia, Brazil, Mexico and Turkey but growth in China and India – nations that were home to 48 per cent of the world’s population living on $ 1.25 a day in 2005 – will be the force behind this shift. From 2005 to 2050, it is estimated that China and India will lift 600 million more people from abject poverty. Fin talk, startups, private sector: On this front, the Government has done the heavy lifting but given the healthy balance sheets of private corporates and banks in India, the conditions are now conducive for a private-sector capex cycle. India in 2025 is also likely to emerge as one of the world's most entrepreneurial societies. Compared to China, the economy depends more on pure private-sector enterprises than state-led ones. These entrepreneurs and new millionaires, who are growing at a rapid pace, will serve as engines for the country's rapid economic growth. Much infrastructure creation is going on, primarily led by the Government’s focus on setting up infrastructure in terms of roads, railways, and so forth. This is the right time for the private sector to create capacities in manufacturing and services, which will generate jobs and absorb the large labour force. India will go on to become a powerhouse of wealth creation. Green energy and IT: India aims to reach net-zero emissions by 2070 and for 50 per cent of power generation to come from non-fossil sources by 2030. It is also pushing electric vehicles (EVs) and green hydrogen, which is another large investment opportunity. Further, during his US visit, PM Modi met Elon Musk, signalling potential investments in India’s renewable energy and EV sectors. Another factor is the country's global advantage in the IT and knowledge-intensive services. India is fast becoming the world's No. 1 destination for outsourcing of low-end services, from call centres to high-end pharmaceutical development, data analytics, financial market research and legal services. The country has emerged as a global leader in delivery of IT-enabled services for the rest of the world. Industry leaders (IBM, Infosys, etc) are increasing their focus on India's domestic market. In 2025, the country could well emerge as one of the world's most connected and IT-savvy societies. Beacon of opportunity for global investors: A landmark deal will now allow General Electric to produce jet engines in India, underscoring its manufacturing prowess. As of March 2024, India attracted a cumulative FDI of $ 990.97 billion from April 2000 to March 2024. This figure reflects India's continued attractiveness despite global challenges. Major global corporations like Google are betting big on India and Amazon intends to invest an additional $ 15 billion by 2030. Hurdles in the journey: Hefty import taxes, problems in land acquisition, bureaucracy, red tape and the dominance of domestic business tycoons makes it difficult for global firms to gain a market share in key industries. 2050: Shaping the future of the global economic order: The next 40 years will be crucial for the European Union (EU) as Germany, the UK, France and Italy are expected to grow by only 1.5 per cent until 2050, facing competition from rapidly expanding economies like China, India, Brazil and Mexico. These emerging nations are poised to reshape the global economic landscape, with China and India leading in manufacturing and technology, while Brazil and Mexico capitalise on natural resources and strategic locations. For the EU to remain competitive, it must focus on innovation, sustainability and digital transformation, while navigating complex geopolitical relationships with these rising powers. This shift will challenge Europe's traditional global leadership, requiring swift adaptation to avoid losing its economic influence. India: The next superpower At a recent summit on India’s path to becoming a global economic superpower, experts highlighted the nation's remarkable resilience, having weathered three oil shocks, the global economic crisis, the Asian financial crisis and the COVID-19 pandemic over the past 50 years. To achieve its ambitious goal of reaching a $ 25 trillion economy by 2047, India will need to sustain an average growth rate of 10.5 per cent, driven by critical investments in infrastructure, skill development, renewable energy and the digital economy. Infrastructure, often described as the backbone of an economy, remains essential to this growth. Further, India’s leadership in the digital sector, particularly in fintech, e-commerce and IT services, is rapidly contributing to its economic expansion and global influence. The country’s young workforce and growing middle class are also poised to fuel long-term growth, providing a demographic dividend that will be crucial in maintaining economic momentum. Two key developments underscore this positive trajectory. Anu Aiyengar, M&A Head at JP Morgan Chase, revealed that global investors have $ 2 trillion ready for deployment, with $ 100-150 billion earmarked for India. She listed the country's rising GDP, economic stability, robust infrastructure and energy transition as prime drivers for mergers and acquisitions. Similarly, Union Minister Nitin Gadkari affirmed that infrastructure development is central to India’s vision of becoming a $ 5 trillion economy. India’s push towards green energy and climate action not only aligns with global sustainability efforts but also positions the country as a leader in clean energy transformation. While India’s potential to emerge as a superpower is evident, challenges such as geopolitical tensions, inflation and inequality must be addressed to sustain growth. The country has taken significant strides in the past decade and as long as it remains focused on development, avoiding social tensions and peripheral issues, it is well-positioned to fulfil its aspirations. As India enters its ‘Amrit Kaal’ or golden era, it must seize the opportunities before it. Global collaborations, particularly in technology, trade and defence, will also play a role in this journey, further integrating India into the global economy and cementing its place as a future superpower.