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Chapter 9: Investment & Infrastructure

Strengthening Connectivity, Capacity and Competitiveness  |  Economic Survey 2025-26
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Chapter Overview

Infrastructure remains central to India's growth strategy. Sustained public capital expenditure since FY15 has driven large-scale investments across roads, railways, ports, power, aviation and digital infrastructure — generating strong multiplier effects on GDP. The defining shift has been from mere asset creation to integrated, system-level development through PM GatiShakti, National Logistics Policy, PPP reforms and evolving financing instruments. India's infrastructure base is also broadening to include digital public infrastructure, clean energy, resilient water systems and space capabilities — all aligned with the Viksit Bharat @2047 vision.

₹11.21L cr
Capex FY26 (BE) — 89% rise from FY22
2.5–3.5x
GDP Multiplier per ₹ spent on infrastructure
1,46,572 km
National Highway Network (FY26) — up 60% from FY14
164
Airports in 2025 (74 in 2014 — 2.2x growth)
253.96 GW
Renewable Energy Capacity (Nov 2025) — 3x+ rise since 2014
509.74 GW
Total Installed Power Capacity (Nov 2025, +11.6% YoY)
🏗
Introduction: Infrastructure as the Engine of Growth
Paras 9.1–9.10

Public Capital Expenditure Trajectory

  • FY19–FY22: CapEx rose 92% — from ₹3.07 lakh crore to ₹5.92 lakh crore
  • FY22–FY26 (BE): Capital outlay rose 89% — from ₹5.92 lakh crore to ₹11.21 lakh crore
  • For every ₹1 spent on infrastructure → GDP gains worth ₹2.5–3.5 over medium term

PM GatiShakti (2021)

  • Multimodal, GIS-enabled planning platform
  • PM GatiShakti Public democratises geospatial data for private developers & researchers
  • Reduces execution risks & transaction costs

National Logistics Policy (NLP)

  • ULIP (Unified Logistics Interface Platform) for digitised logistics
  • LEADS framework — Logistics Ease Across Different States
  • Directly improves manufacturing competitiveness

💡 Three Levers of Infrastructure Growth (9.8)

  • Continued public capex with improved project planning & execution
  • Crowding-in private investment through a stronger PPP pipeline
  • Deeper, resilient long-term financing via capital markets and bank/NBFC credit

Note: Urban infrastructure is covered in Ch.15; social infrastructure (health & education) in Ch.11.

💰
Enhancing Infrastructure Financing & Private Participation
Paras 9.11–9.19 | Financing Diversification & PPPs
Bank & NBFC Credit
  • Bank credit to infra: 4.6% YoY (Oct 2025)
  • NBFC credit to commercial sector CAGR: 43.3% (FY20–FY25)
  • vs. 25% CAGR for non-food bank credit
REITs & InvITs
  • Enabling long-term institutional capital in infra assets
  • ₹13,893 crore raised by listed REITs & InvITs (Apr–Nov 2025)
  • From Jan 2026: MF/SIF investments in REITs treated as equity instruments
Regulatory Milestones
  • RBI Project Finance Directions 2025 (effective 01 Oct 2025)
  • Unified framework for project lending; revised DCCO treatment
  • SM REIT: min asset ₹50 cr (vs ₹500 cr for full REIT)

PPP at a Glance — India's Global Standing

  • India consistently top 5 globally in private infrastructure investment (World Bank PPI 2024)
  • India: largest recipient in South Asia — over 90% of region's private infra investment
  • PPPAC: 129 projects, ₹5,60,965.71 crore recommended (FY15 to Dec 2025)
  • VGF: 72 projects approved; ₹7,941.84 crore sanctioned (₹6,314.86 crore disbursed)
  • 3-Year PPP Pipeline (Union Budget FY26): 852 projects across central ministries & States/UTs; combined TPC > ₹17 lakh crore

PPP Project Approvals by PPPAC

YearNo. of ProjectsTPC (₹ Crore)
FY2368,890
FY24949,067
FY251569,583
FY26 (upto Nov)281,04,686

PPP Models in India

ModelFull Form
BOTBuild-Operate-Transfer
DBFOTDesign-Build-Finance-Operate-Transfer
HAMHybrid Annuity Model
TOTToll-Operate-Transfer

🎯 PPP Next Frontier (Box IX.2)

  • Extend PPP maturity to health, education, warehousing, sanitation, green hydrogen, energy transition
  • PPP must reflect the third "P" — Partnership: co-design, shared early-stage risks, long-term service outcomes
  • Move from transaction-centric execution → system-level market building
  • State must absorb early-stage risks (land, clearances, demand) that private capital cannot efficiently price
  • Private players in de-risked brownfield assets should increase appetite for greenfield BOT projects
🛣
Core Physical Infrastructure
Roads | Railways | Aviation | Ports | Inland Waterways | Shipbuilding

🛣 Roadways & Highways (9.20–9.23)

1,46,572 km
NH Network FY26 (+60% from 91,287 km in FY14)
5,364 km
High-Speed Corridors (~10x from 550 km in FY14)
9,704 km/yr
Avg Annual Construction (2014-25) vs 4,174 km/yr (2004-14)
99.7%
PMGSY — Eligible habitations connected (Dec 2025)

Key Initiatives — Box IX.3

  • HSC target: ~26,000 km by FY33; 9,366 km under implementation
  • Public InvIT planned for 2026; ₹1.52 lakh crore already monetised via ToT & private InvITs
  • PPP pipeline: 13,400 km (₹8.3 lakh crore) over 3 years
  • Technology: Drone surveys, AIMC, pre-cast components, Drone Analytics Monitoring, AI pothole detection

PMGSY-IV (Sep 2024)

  • Target: Connect 25,000 unconnected habitations
  • Construct/upgrade 62,500 km of roads & bridges
  • Cost: ₹70,125 crore (FY25–FY29)
  • PM-JANMAN (PTVGs): 8,000 km targeted; 2,495 roads (7,323.96 km) sanctioned as of Dec 2025

🚆 Railways (9.24–9.27)

Network & Electrification
  • Rail network: 69,439 Rkm (March 2025)
  • FY26 target: +3,500 km extension
  • Electrification: 99.1% (Oct 2025)
  • 78%+ tracks upgraded for 110 kmph+
Dedicated Freight Corridors
  • Total: 2,843 km; Commissioned: 2,741 km (96.4%)
  • Eastern DFC (1,337 km): Fully completed
  • Western DFC: 1,404 of 1,506 km done
  • Reduces freight transit times; lowers logistics costs
Major Projects
  • MAHSR (Mumbai-Ahmedabad HSR): 55%+ physical progress (Oct 2025)
  • Amrit Bharat Station Scheme: 1,337 stations (15 on PPP)
  • GatiShakti Corridors: 434 projects, ₹11.17 lakh crore
  • Kavach ATP system rollout for safety

✈ Civil Aviation (9.28–9.29)

India: World's 3rd Largest Domestic Aviation Market

  • Airports: 74 (2014) → 164 (2025)
  • Passengers: 412 million (FY25); projected 665 million by FY31
  • Air cargo: 2.53 MMT (FY15) → 3.72 MMT (FY25)
  • India: 0.11 airports/million people vs US (47.35) & China (0.39) — huge headroom
  • Airport capacity: ~575 million passengers per annum (post modernisation)

RCS-UDAN Scheme

  • 657 routes connecting 93 airports (incl. heliports & water aerodromes)
  • Modified UDAN: 120 new destinations, 4 crore passengers over 10 years

Legislative Reforms

  • Bharatiya Vayuyan Vidheyak, 2024 — replaces Aircraft Act, 1934
  • Protection of Interests in Aircraft Objects Act, 2025 — aligns leasing with global standards

⚓ Ports & Shipping (9.30–9.33)

Port PPP Growth

  • PPP projects: 37 (FY15) → 87 (FY25)
  • PPP value: ₹16,180 cr → ₹61,029 crore (+377%)
  • 57 operational PPP projects (₹42,235 cr) — added ~660 MTPA capacity
  • By 2030: PPP & captive operators → 80% of all cargo at major ports
  • Pipeline: 48 PPP projects worth ~₹23,000 crore (FY26–FY31)

Global Ranking

  • 2 Indian ports in top 30 globally
  • 7 Indian ports in top 100 (World Bank Container Port Performance Index 2024)
  • Average container vessel turnaround: near global-best standards
  • Maritime India Vision 2030 & Maritime Amrit Kaal Vision 2047

Major Legislative Reforms (Box IX.6)

  • Merchant Shipping Act, 2025 — aligns with IMO conventions, seafarer welfare
  • Coastal Shipping Act, 2025 — removes licensing requirements for Indian vessels, promotes coastal trade
  • Indian Ports Act, 2025 — integrated port development; Maritime Single Window System
  • Bills of Lading Act, 2025 — simplifies legal provisions, reduces disputes
  • Carriage of Goods by Sea Act, 2025 — aligns with Hague-Visby Rules

🚢 Inland Water Transport & Shipbuilding (9.34–9.36)

IWT Progress
  • 32 National Waterways operational (5,155 km)
  • Cargo: 18 MMT (2013-14) → 146 MMT (2024-25)
  • Passenger movement: 7.6 crore (2024-25)
  • IWT modal share target: 2% → 5% by 2030; 500 MMT by 2047
  • JMVP (NW-1 Varanasi–Haldia): ₹4,600 crore; cargo up 220%
Shipbuilding Package (Sep 2025)
  • Total package: ₹69,725 crore (~USD 8.3 billion)
  • SBFAS: ₹24,736 crore (till March 2036)
  • Maritime Development Fund: ₹25,000 crore
  • Shipbuilding Development Scheme: ₹19,989 crore
  • Capacity target: 4.5 million GT annually
  • Large ships included in Infrastructure HML (Sep 2025)

Kochi Water Metro (Box IX.8) — A Scalable Model

  • Electric-hybrid ferries by Cochin Shipyard Limited; LTO batteries; integrated with Kochi Metro
  • Cumulative ridership: 5 million+ passengers (2025)
  • Cost: A 75 km water metro can be built at ~1/10th the cost of a comparable elevated metro
  • Being replicated in 21 cities (feasibility studies underway)
⚡
Energy Sector
Power Distribution | Renewable Energy | India Energy Stack | Paras 9.37–9.43
509.74 GW
Total Installed Power Capacity (Nov 2025, +11.6% YoY)
49.83%
Share of RE in Total Installed Capacity (Nov 2025)
253.96 GW
Total RE Capacity (Nov 2025) — 3x+ rise from 76.38 GW (2014)
34.56 GW
Historic RE addition in FY26 (Apr–Nov 2025) — Largest ever

DISCOM Turnaround (Box IX.10)

  • PAT: +₹2,701 crore in FY25 vs loss of ₹67,962 crore in FY14
  • AT&C losses: 22.62% (FY14) → 15.04% (FY25)
  • ACS-ARR gap: ₹0.78/kWh → ₹0.06/kWh (FY25)
  • Outstanding dues: ₹1.4 lakh crore (Jun 2022) → ₹4,927 crore (Jan 2026)
  • Energy demand-supply gap: 4.2% (FY14) → Nil (Nov 2025)

Renewable Energy — Global Position

  • India ranks 3rd globally in total RE capacity & solar capacity
  • India ranks 4th globally in installed wind capacity
  • RE capacity: 3-fold increase in last decade
  • FY26 RE mix: Solar 27.20 GW + Wind 3.95 GW + Hydro 2.68 GW + Nuclear 0.70 GW + Bio 0.03 GW

Power Sector Reforms

  • Electricity (Amendment) Bill, 2026: regulated competition in distribution; cost-reflective tariffs; payment security for generators
  • RDSS (Revamped Distribution Sector Scheme, 2021): ₹3.03 lakh crore outlay; ₹2.8 lakh crore projects approved; smart metering & distribution infra
  • SAUBHAGYA: 2.86 crore households electrified; 18,374 villages electrified under DDUGJY
  • Total investment in distribution infra: ~₹1.85 lakh crore (DDUGJY + IPDS + SAUBHAGYA)

⚡ India Energy Stack (IES) — Box IX.11

A Digital Public Infrastructure (DPI) for the power sector — not a centralised platform but common digital rails enabling trusted interactions among stakeholders.

  • Consumer agency: portable participation, consent-based data sharing, monetisation of rooftop solar/EVs/flexible loads
  • Open innovation: P2P electricity trading, demand-response aggregators, AI-enabled energy agents
  • DISCOM benefits: reduced surplus payouts, improved forecasting; regulators: "policy as code"
  • Livelihood creation: energy micro-entrepreneurs; convergence with women SHGs under DAY-NRLM (Jeevika)
  • Nodal agency: REC Limited; under Ministry of Power
📶
Future-Ready Digital Infrastructure
Telecommunications | IT Infrastructure | Paras 9.44–9.48
86.76%
Tele-density (from 75.23%)
99.9%
Districts with 5G coverage (5.18 lakh 5G BTS)
25.24 GB
Monthly data consumption/user (from 0.06 GB in 2014)
₹8.27
Avg revenue per GB (from ₹268.97 — 97% decline)

Telecom Infrastructure (Dec 2025)

  • Mobile BTS: 31.87 lakh
  • Mobile towers: 8.48 lakh
  • BharatNet: 2.14 lakh Gram Panchayats connected via OFC & satellite
  • 4G saturation: 13,415 towers made functional, covering 19,901 villages
  • RoW portal (2022): processing time 451 days (2019) → 40 days (2025)

PLI Telecom & 5G/6G Innovation

  • PLI outlay: ₹12,195 crore; Investment attracted: ₹4,700 crore
  • Sales enabled: ₹1,00,000 crore (₹21,000 crore exports); Jobs: 30,000
  • 100 5G Use Case Labs for research & start-up collaboration
  • Bharat 6G Vision (2023) + Bharat 6G Alliance
  • TTDF: 136 projects approved (₹542.23 crore)
  • NFAP-2025 + Spectrum Roadmap for 6G Services, 2025

Citizen-Centric Security & IT Infrastructure

  • Sanchar Saathi, ASTR (AI fraud detection), FRI, ICDR: Disconnected ~3.3 crore fraudulent connections; prevented ₹660 crore financial losses
  • Data Centres: ~1,280 MW installed capacity (June 2025; 130 private + 49 govt); projected 4 GW by 2030
  • MeghRaj (GI Cloud): 26 Cloud Service Providers empanelled (Dec 2025) for govt e-governance
  • India's telecom vision: Samaveshit, Viksit, Tvarit, Surakshit
🌏
Social & Emerging Sector Infrastructure
Jal Jeevan Mission | Namami Gange | Tourism | Space | Paras 9.49–9.59

💧 Jal Jeevan Mission (Har Ghar Jal)

JJM Achievements

  • 81%+ rural households with clean tap water access
  • 15.76 crore rural homes with FHTC (Dec 2025)
  • Original outlay: ₹2,08,652 crore (launched 2019)
  • Extended to 2028 with additional ₹67,000 crore (Union Budget 2025-26)

Namami Gange Programme

  • HAM-PPP for STPs (payment linked to performance)
  • 'One City One Operator' model (Kanpur, Prayagraj)
  • Gangetic Dolphin: ~3,500 (2015) → 6,327 (2021-23)
  • Afforestation: 33,024 hectares along Ganga corridor
  • 20 Red-Crowned Roofed Turtles reintroduced (April 2025)

🏕 Tourism Infrastructure

Swadesh Darshan 2.0
  • Sustainable & responsible tourism destinations
  • 53 projects — ₹2,208.87 crore sanctioned
  • CBDD sub-scheme: 38 projects in 24 States/UTs (₹697.68 crore)
PRASHAD Scheme
  • Pilgrimage & heritage site development
  • 54 projects in 28 States/UTs
  • Estimated cost: ₹1,726.74 crore (since Jan 2015)
Water Resources (Box IX.13)
  • M-CADWM (SCADA/IoT for irrigation)
  • C-Flood Platform: 2-day advance flood forecasts
  • National Register of Dams 2025: 6,628 dams
  • River Cities Alliance: 30 → 145 cities

🚀 Space Sector (9.56–9.59)

India's Space Achievements 2025

  • 56 active space assets (20 communication, 8 navigation, 4 scientific, 21 Earth observation, 3 tech demo)
  • SpaDeX: India became the 4th nation to achieve autonomous satellite docking
  • GSLV-F15 + NVS-02 (Jan 2025): 100th lift-off from Sriharikota
  • Axiom-04 mission (July 2025): Indian astronaut on ISS conducting microgravity experiments
  • NISAR (NASA-ISRO Synthetic Aperture Radar): launched July 2025
  • LVM3-M6 (Dec 2025): BlueBird Block-2 — heaviest LEO payload in Indian space history

🌌 Space Vision 2047 (Box IX.14 & 9.59)

  • 300+ space start-ups
  • IN-SPACe: Single-window for NGEs; FDI up to 100%
  • VC Fund: ₹1,000 crore (Oct 2024); Tech Adoption Fund: ₹500 crore (Feb 2025)
  • 70+ technology transfers from ISRO to industry
  • Dedicated launch pad at Kulasekarapattinam, Tamil Nadu

🌍 5 Approved Future Missions

  • Gaganyaan follow-on → Bharatiya Antariksh Station (BAS) first module
  • Chandrayaan-4: Lunar Sample Return Mission
  • Chandrayaan-5/LUPEX: Lunar Polar Exploration
  • Venus Orbiter Mission
  • Next Generation Launch Vehicle
  • BAS by 2035; First manned lunar mission by 2040
📌
Conclusion & Key Takeaways
Paras 9.60–9.62 | The Road Ahead
🏗
Scale & Integration
Coordinated investments across all infrastructure sub-sectors yielding tangible efficiency gains
💰
Financing Reform
PM GatiShakti, asset monetisation, InvITs/REITs and PPP reforms crowding-in private capital
🌐
Broadened Concept
Infrastructure now encompasses DPI, clean energy, resilient water management and space capabilities
🥇
Viksit Bharat 2047
Infrastructure as central pillar for India's medium-term growth & long-term development vision

Outlook Priorities

  • Maintain public investment momentum while deepening private participation
  • Align infrastructure with decarbonisation, digitalisation and resilience
  • Improvements in multimodal integration reduce logistics costs → strengthen India's global competitiveness
  • Strengthening institutional capacity across project lifecycle (DPR quality, dispute resolution, technology adoption)

Quick Reference: Key Numbers at a Glance

SectorKey MetricValue / Status
Public CapExFY26 Capital Outlay₹11.21 lakh crore (+89% from FY22)
Infra MultiplierGDP return per ₹ invested₹2.5–3.5
HighwaysNH Network (FY26)1,46,572 km (+60% from FY14)
RailwaysElectrification99.1% (Oct 2025)
RailwaysDFC Commissioned2,741 of 2,843 km (96.4%)
Civil AviationAirports164 (2025) vs 74 (2014)
PortsPPP value growth+377% (FY15–FY25)
IWTCargo throughput146 MMT (2024-25) vs 18 MMT (2013-14)
ShipbuildingRevitalisation package₹69,725 crore (Sep 2025)
PowerInstalled capacity509.74 GW (+11.6% YoY)
RenewablesRE Capacity253.96 GW (3rd globally)
DISCOMsPAT FY25+₹2,701 cr (vs −₹67,962 cr in FY14)
Telecom5G coverage99.9% districts
BharatNetGPs connected2.14 lakh Gram Panchayats
JJMRural tap water access81%+ (15.76 crore homes)
SpaceActive assets56 satellites | 300+ start-ups

Practice MCQs — Chapter 9

1. India's Government capital outlay increased by nearly 89 per cent from FY22 to FY26. What was the budgeted capital outlay for FY26?
(a) ₹8.5 lakh crore
(b) ₹11.21 lakh crore
(c) ₹9.75 lakh crore
(d) ₹13.5 lakh crore
Correct: (b)
The government's capital outlay rose from ₹5.92 lakh crore (FY22) to a budgeted ₹11.21 lakh crore for FY26, an 89% increase. The infrastructure multiplier is 2.5–3.5x GDP.
2. Which of the following statements about India's PPP framework is/are correct?
1. India ranks among the top 5 globally in private infrastructure investment (low-middle income economies).
2. India accounts for over 90% of South Asia's total private infrastructure investment.
3. The PPP pipeline announced in Union Budget FY26 comprises 852 projects worth over ₹17 lakh crore.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 3 only
Correct: (c)
All three statements are correct as per Economic Survey 2025-26. India's PPP programme has matured significantly with growing private investment and a strong project pipeline.
3. India's renewable energy capacity reached 253.96 GW by November 2025. What is India's global ranking in terms of total installed renewable energy capacity?
(a) 1st
(b) 2nd
(c) 3rd
(d) 4th
Correct: (c)
India ranks 3rd globally in total RE capacity and installed solar capacity. It ranks 4th in installed wind capacity. RE constitutes 49.83% of India's total installed power capacity.
4. Consider the following about India's space achievements in 2025:
1. SpaDeX made India the 3rd nation to achieve autonomous satellite docking.
2. The 100th lift-off from Sriharikota was achieved by GSLV-F15 with the NVS-02 satellite.
3. NISAR is a collaborative mission between NASA and ISRO.
Which are correct?
(a) 1 and 3 only
(b) 2 and 3 only
(c) 1 and 2 only
(d) 1, 2 and 3
Correct: (b)
SpaDeX made India the 4th (not 3rd) nation to achieve autonomous satellite docking. Statements 2 and 3 are correct — GSLV-F15/NVS-02 was the 100th Sriharikota lift-off (Jan 2025), and NISAR is a NASA-ISRO collaboration launched in July 2025.
5. The India Energy Stack (IES), conceived as a DPI for the power sector, has which nodal agency for its design and implementation?
(a) NTPC Limited
(b) Power Grid Corporation
(c) REC Limited
(d) CERC
Correct: (c)
REC Limited is the nodal agency for IES under the Ministry of Power's leadership. IES is not a centralised platform but provides open digital rails for trusted interactions in the power ecosystem.
6. Under Jal Jeevan Mission, approximately what percentage of rural households had access to clean tap water connections as of December 2025?
(a) 65%
(b) 72%
(c) 81%+
(d) 92%
Correct: (c)
Over 81% of rural households now have access to clean tap water, with 15.76 crore rural homes receiving FHTC. The mission has been extended to 2028 with an additional ₹67,000 crore allocation in Union Budget 2025-26.
7. The DISCOM sector recorded a historic positive Profit After Tax (PAT) in FY25. Which of the following correctly describes the transformation?
(a) PAT of ₹2,701 crore in FY25 vs loss of ₹32,000 crore in FY14
(b) PAT of ₹2,701 crore in FY25 vs loss of ₹67,962 crore in FY14
(c) PAT of ₹5,200 crore in FY25 vs loss of ₹67,962 crore in FY14
(d) PAT of ₹2,701 crore in FY25 vs loss of ₹45,000 crore in FY14
Correct: (b)
DISCOMs recorded PAT of +₹2,701 crore in FY25 vs. a loss of ₹67,962 crore in FY14. AT&C losses fell from 22.62% to 15.04%, and the ACS-ARR gap narrowed from ₹0.78/kWh to ₹0.06/kWh.
8. India's Inland Water Transport (IWT) cargo traffic surged from 18 MMT (2013-14) to 146 MMT (2024-25). What is the target cargo traffic under Maritime Amrit Kaal Vision 2047?
(a) 200 MMT by 2030; 300 MMT by 2047
(b) 250 MMT by 2030; 400 MMT by 2047
(c) 200+ MMT by 2030; 500 MMT by 2047
(d) 300 MMT by 2030; 600 MMT by 2047
Correct: (c)
The Maritime Amrit Kaal Vision targets IWT cargo of 200+ MMT by 2030 and 500 MMT by 2047, while also increasing the modal share of IWT from 2% to 5%.