Transport Infrastructure in Focus
Transport Infrastructure to continue as a key focus area for new Government with massive capital outlay of up to ₹30 trillion expected over next five years. Construction companies are likely to be the major beneficiaries and will witness strong order inflows estimated between ₹15-18 trillion.
The transport infrastructure is set to continue as key focus area for the new Government with a massive capital outlay of up to ₹30 trillion expected over the next five years. The Government is likely to maintain the continuity on the major programmes launched during its last tenure viz. Bharatmala Pariyojana (Highways), Sagarmala (Ports), railway station redevelopment programme, inland waterways development, Namami Gange, Swachh Bharat Mission, UDAN (Airports), AMRUT and Smart Cities (Urban Infra). The last five-year period (FY2014-FY2019) had witnessed huge spending by the Government on segments like roads (increased by ~353% between FY2015 to FY2019), railways (increased by ~146% times between FY2015 to FY2019), metro rail, etc, which is likely to increase further over the next five years.
As per the current government manifesto, the next five years will see massive infrastructure build-up in India. The capital investment in the infra sector has been proposed at ₹100 trillion over the next five years - which is a huge increase from the current level of capital investment in the sector. Amongst the key segments, transport infrastructure is expected to see a major jump with an estimated ₹25-30 trillion of capital outlay over the next five years. Such an investment will provide tremendous long-term benefits for the Indian economy. Construction companies are likely to be the major beneficiaries and will witness strong order inflows, estimated between ₹15-18 trillion on the basis of these infrastructure capex plans.
In the road sector, the manifesto mentions constructing 60,000 km of National Highways over the next five years – at an average rate of 12,000 km per year. Given that the highway construction pace had grown significantly over the last four to five years (pace of highway construction increased from 4,410 km in FY2015, to 9,829 km in FY2018, and ~10,855 km in FY2019), and sizeable number of under-implementation projects, the target seems achievable.
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NBM&CW August 2019
