Infrastructure Sector In India

India's high growth imperative in 2023 and beyond will primarily be driven by major strides in key sectors, with infrastructure development being a critical force leading to economic progress. To achieve a US$ 26 trillion economy, infrastructure investments and ease of doing business initiatives will play a pivotal role. Prime Minister Narendra Modi has emphasized the importance of infrastructure as a crucial pillar for good governance across sectors.

The government has launched the US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, to bring about systemic and effective reforms in the sector. Infrastructure development is vital for India's economic growth and includes power, bridges, dams, roads, and urban infrastructure. It acts as a catalyst for the growth of allied sectors like townships, housing, and construction projects.

Market Size of Infrastructure Sector in India

In Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to Rs.10 lakh crore (US$ 122 billion), which would be 3.3% of GDP. The National Infrastructure Pipeline (NIP) includes 9,142 projects across 34 sub-sectors with an estimated investment of US$ 1.9 trillion. The transportation sector and roads and bridges sub-sector account for a significant number of under-development projects.

India's logistics market is estimated to reach US$ 556.97 billion by 2027, growing at a CAGR of 6.28%. The country aims to reduce logistics cost from 14% to 8% of GDP, leading to a reduction of approximately 40% within the next five years. Investments in airports, metro networks, and urban freight are also expected to drive growth in the infrastructure sector.

Government initiatives and investments

The government has introduced various initiatives to boost the infrastructure sector. Under Budget 2023-24, there is a focus on increasing capital investment outlay, enhancing private investment in infrastructure, and providing interest-free loans to state governments. Additionally, there are plans for new transport infrastructure projects, airports, and urban infrastructure development funds.

Investments from foreign entities, public-private partnerships, and government allocations have contributed to the growth of the infrastructure sector. Several infrastructure projects, including those related to roads, railways, and airports, have been initiated or are under development.

Road Ahead

1. To achieve its goal of becoming a US$ 5 trillion economy by 2025, India needs to invest significantly in infrastructure development. 
2. The government has ambitious plans to strengthen railway infrastructure, develop more airports, and improve urban facilities. Investment in long-term maintenance and building strong structures is essential for sustainable growth.
3. The infrastructure sector is expected to continue experiencing rapid expansion, driven by urbanization, foreign investment, and the smart cities program. The government's focus on infrastructure development and its role in India's economic growth makes it a top priority for future investments and partnerships.

How ASC Group assist the infrastructure industry?

A team of expert professionals such as CA, CS, Advocates, and Insolvency Professionals assists in all kinds of legal, financial, taxation, and management consulting services.

1. We assist in all regulatory and compliance matters under the Companies Act
2. Understanding the business plan and providing strategies to grow faster
3. Assist in legal compliances and documentation related to business matters
4. ASC Group assists in comprehensive tax matters such as direct tax, GST, international tax, expat tax, etc.
5. Assist in matters related to restructuring such as mergers 7 Acquisitions, joint ventures, partnerships, etc.
6. ASC Group also assists in insolvency and Bankruptcy matters
7. Identifying the suitable jurisdiction from tax and regulatory perspectives;
8. Formulating profits repatriation strategies or tax-efficient cash;
9. Drafting/reviewing contracts with local joint venture partners, due diligence support, and other business contracts;
10. Setting up formalities like the incorporation of a company or LLP, tax deduction account number (TAN), the opening of bank accounts, obtaining) and permanent account number (PAN);
11. Providing administrative, legal, HR, payroll Accounting, and IT outsourcing services