India to investment Rs 36.6 lakh crore in green infra in FY24-30 period: CRISIL

India’s infrastructure spending is on the rise, including that on green infrastructure. A new report by CRISIL states that India will spend nearly Rs 143 lakh crore on infrastructure in seven fiscals through 2030. This is more than twice the Rs 67 lakh crore spent in the previous seven from financial year 2016-17 (FY17). And of the total Rs 143 lakh crore, around Rs 36.6 lakh crore will be green investments. Interestingly, there is a rise of 5x in green investments compared with FY17-23. And the investments in the green space in India will be led by renewable energy (Rs 30.3 lakh crore), followed by transportation (Rs 6.3 lakh crore).  

“CRISIL expects India’s gross domestic product to grow at an average 6.7 per cent through [FY31] to be the fastest-expanding large economy. Per capita income is seen rising from $2,500 now to $4,500 by [FY31], creating a middle-income country. This growth will be underpinned by massive all-round infrastructure development, with sharp focus on integrating sustainability,” says Amish Mehta, Managing Director & CEO, CRISIL Ltd. 

The next phase of infrastructure development will be marked by growth in the average ticket size of projects and a significant number of mega-scale projects. Appropriate and consistent policy and regulatory interventions and focus on timely execution build an attractive case for various stakeholders to accelerate investments across infrastructure sectors. 

Prominent sectors such as roads and power are expected to remain major contributors, while relatively nascent ones such as EVs, solar, wind, and hydrogen will pick up pace. 

The share of EVs in India’s overall automobile sales is likely to reach around 30 per cent by 2030. Two-wheeler EV sales are expected to outpace other segments up to 2028, while demand for EV buses will be driven by state transport undertakings. Favourable total cost of ownership and total cost of acquisition, as well as model availability for two- and three-wheelers will support EV offtake in coming years. 

The share of renewable energy in total capacity is estimated to grow 4x between fiscals 2023 and 2030. Solar will account for half of the incremental non-fossil generation. There is a growing need to leverage emerging technologies such as ‘floatovoltaics’ (floating solar), offshore wind technology and green hydrogen. 

The hydrogen sector is poised to attract substantial investments, estimated at Rs 1.5 lakh crore between FY24 and FY30, driven by government incentive schemes. Mandates for green hydrogen use and incentive schemes will be important here considering the cost of production of green hydrogen is twice that of fossil-based hydrogen. 

CRISIL has also launched CRISIL InfraInvex, which incorporates environmental sustainability in the index framework to reflect its increasing importance in investment decisions. It highlights the massive funding need that can be met through accelerated bond market activity, greater foreign investment interest and robust equity markets. 

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