India is poised for a massive infrastructure boom, with an estimated Rs 17.5 lakh crore investment projected for its critical renewables, roads, and real estate sectors over the current and next fiscal years.
This robust 15% annual growth, a significant jump from the Rs 13.3 lakh crore invested in the preceding two fiscals, signals India’s accelerating push towards a sustainable and developed future, CRISIL Ratings said during a webinar today.
According to the market advisory firm, this substantial financial injection underpins the nation’s ambitious development goals, particularly its 2030 targets. “What remains constant across these three sectors is the strong investment growth,” said Krishan Sitaraman, Chief Ratings Officer, CRISIL Ratings. He said, “While adapting to the new business dynamics will pose some challenges, credit profiles of Crisil-rated developers and projects will remain resilient.”
The renewable energy sector is at the forefront of this investment drive, undergoing a significant transformation. The focus is shifting towards hybrid and storage-backed capacities to address power intermittency and ensure round-the-clock power availability.
These innovative projects are projected to account for a massive 37% of the approximately 75 GW capacity to be added in this and the next fiscal year, a substantial jump from just 14% in the previous two fiscal years. This strategic move highlights India’s commitment to harnessing solar and wind power more effectively.
However, challenges loom. Krishnan acknowledged that a key hurdle for the renewable energy sector is “the challenge is to match transmission capacity with growing renewable capacity.” Timely availability of evacuation infrastructure and potential delays in transmission capacity ramp-up due to right-of-way issues or equipment shortages could pose hurdles to the rapid deployment of these green projects.
Manish Gupta, Deputy Chief Ratings Officer, CRISIL Ratings, elaborated on the broader energy landscape. He noted that while thermal power continues to see “significant growth in power mix,” nuclear energy remains “marred by policy-related matters yet to be sorted out. ” Despite “a lot of talk and government encouragement,” legal complexities mean progress in nuclear will “take time.”
Regarding storage, Gupta observed that despite “a number of hybrid projects,” “storage capacity has not much been commissioned.” However, he offered an optimistic outlook on battery technology, stating that “battery prices are also coming down [and] will stabilize at a lower level,” which could significantly boost storage deployment.
He emphasized the critical importance of green hydrogen, calling it “very important good in the mid- to long-term perspective.” He did, however, highlight the current economic reality that “grey [hydrogen] is significantly lower in cost” due to existing efficiencies.
