A report by Knight Frank India states that India’s economy needs to grow at a compound annual growth rate (CAGR) of 10.1 per cent from 2024 to 2030 in order to reach a size of 7 trillion dollars. The potential for private investment in infrastructure development in India is estimated to be between 103.2 billion dollars and 324 billion dollars.
“India is on the verge of a transformative phase in infrastructure development. By leveraging private investment, we can expedite our progress towards meeting our ambitious economic growth goals,” said Rajeev Vijay, Executive Director-Government and Infrastructure Advisory, Knight Frank India.
The Union Government aims to lower its gross fiscal deficit to below 4.5 per cent by 2025, and boosting private sector participation in infrastructure development will play a key role in achieving this fiscal target.
With the current investment share composition of 51.2% from the Centre, 44.1 per cent from states, and 4.7 per cent from the private sector, the estimated gross fiscal deficit in 2030 is projected to reach 4.7 per cent, exceeding the government’s target fiscal deficit threshold.
In this scenario, private participation in India’s infrastructure development is projected to total 103.2 billion dollar by 2030. However, the current share of private investment is minimal and must be significantly increased to meet growth and fiscal goals.
A 10 per cent increase in private sector investment in infrastructure, raising its share to 14.7 per cent, could unlock an opportunity worth 324 billion dollars—an annual average of dollar54 billion through 2030. This boost in private investment could significantly aid the government in maintaining healthy fiscal balances.
The report stated that by boosting private participation in infrastructure development, the government could reallocate funds to other critical areas of economic growth, such as public healthcare, human capital development, and debt servicing. This strategy would help support the economy’s long-term growth.
A sector-wise analysis shows that renewable energy, data centres, roads and highways, as well as warehousing and logistics, have substantial potential to attract private investments.
The report highlighted that sectors like urban mass transit, airports, and power distribution present significant investment opportunities, driven by rapid urbanisation and changing demographics. “To meet its ambitious economic growth targets, India requires substantial infrastructure investments,” the report emphasised.
