Informist New Delhi

Infrastructure spending in India--including investments from the government, states, and private sector--is likely to increase 1.6 times over the next five years to INR 90 trillion-INR 100 trillion, Crisil Intelligence said in a report released Thursday. Roads and the power sector will be the top sectors to attract capital investments, Crisil said in its India Outlook report for 2025.

"Private sector involvement in infrastructure, which has been increasing, is poised to intensify with the government's renewed emphasis on the BOT model in roads," the report said. "The government's National Monetisation Pipeline is also expected to play a key role in boosting private sector participation by facilitating its greater involvement in infrastructure development." Capital expenditure in recent years has mainly been driven by the government, especially after the COVID-19 pandemic, while the private sector as a whole has refrained from making investments. While central government capital expenditure has risen substantially from the pre-pandemic average of 1.7% of GDP, it has now stabilised at 3.1% of GDP, Crisil said.  

"With the government normalising capex, it is time for the private sector to take the lead in furthering the investment momentum," Crisil said in the report. "The ability of private corporates to invest is supported by their deleveraged balance sheets, the healthy balance sheets of lenders, and turning of the interest rate cycle."