Infrastructure Primer

Long-term economic growth is always linked with infrastructure development. Infrastructure is the catalyst improving living standards and the business environment of a country. India has shown immense growth in the last decade, the Indian market has opened up, the foreign investment policy liberalized and the government has been actively pursuing the goal of infrastructure development. The sector is vast and includes various sub-sectors such as roads and highways, airports, railways and ports, power, including renewable and non-renewable sources of power and more recently nuclear energy and so on.

Insufficiency of funds with the primary infrastructure developer, the government, has been the roadblock slowing down the development of infrastructure. The government is attempting to bridge the gap between the need for infrastructure and the funds required for the same, through close partnership between the public and private sectors, with a vital role reserved for investors. With every passing year, the government formulates policies and incentive programmes to provide a boost to infrastructure and to accelerate national economic development.

This Primer provides an overview of some of the key sub-sectors that fall within the “Infrastructure Sector,” the opportunities available, the laws applicable and a general idea of the various procedures/issues relevant in the following sub-sectors:

  • Roads and Highways
  • Railways
  • Ports
  • Airports
  • Power
  • Renewable sources of energy
  • Nuclear

The investment in infrastructure has been growing under the government’s Five year plans with increased private sector participation. The government has proposed to spend US$ 1 trillion  in the next 5 years in order to bring Indian roads, ports, airports to match world standards. As per the extant foreign direct investment (“FDI”) policy, 100% FDI is permitted for roads, highway construction, power generation, transmission, ports and other key infrastructure areas except aviation and railways.