Infrastructure sectors account for the bulk of investment going into the top ten sectors includes electricity generation, steel, construction, railway transport, road transport, shipping and telecommunications. This is a very good news for long term development in India.
Today the sector attracting the largest investment is electricity. There are 1,141 outstanding projects involving a total cost of Rs 11,65,928 crore. Of these 261 projects are under implementation, while the rest have been announced or proposed. The second biggest investment draw is the steel industry. It has 310 outstanding projects at a total cost of Rs 5,07,986. Construction comes third with 1,483 projects.
The biggest industries are the capital intensive ones of electricity generation, steel and chemicals. The rush of SEZ construction, along with the nationwide boom in supply of real estate, has given big values for construction, clustered around the largest cities. Large values are seen for the infrastructure of transportation and communication (railways, roads, shipping, telecom).
Delving into each of these industries reveals many interesting features.
In the case of electricity, the biggest projects are the nuclear generation plants made possible by the India-US nuclear deal. The table also shows the continued domination of the public sector in electricity generation, thus highlighting the failure of electricity reforms, which have not elicited adequate interest from the private sector. The table with large railway projects is particularly important because of the potential of railways as the most energy-efficient form of transportation.
The writer is senior fellow at the National Institute of Public Finance and Policy