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Infrastructure development in India: a systematic review

• Original Paper
• Published: 14 October 2023
• Volume 16 , article number  35 , ( 2023 )

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• A. Indira   ORCID: orcid.org/0000-0003-1189-5922 1 &
• N. Chandrasekaran   ORCID: orcid.org/0000-0002-0076-2019 2  

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It is now well-accepted that infrastructure development is essential for the growth of any economy. Successive governments in India, both at the Union and State level have given a thrust towards increased budgetary spending on infrastructure to help economic growth. On the eve of the 75th year of independence, there is a reiteration for long-term initiatives, including focused programs for roads, railways, airports, waterways, mass transport, ports, and logistics to further boost infrastructure spending. Keeping this in mind, the authors sought to systematically review the literature on how infrastructure development has unfolded in India between the years 2000–2022. The study shows that with diverse economic growth in India, there is interest in infrastructure development aligned with public interests. Infrastructure development is contextual and location-specific. Access to infrastructure positively impacts social and economic outcomes. There is however growing concern for sustainable development with rapid urbanization.

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Source  Handbook of Statistics on Indian Economy, 2021–22, Table 93

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Indira, A., Chandrasekaran, N. Infrastructure development in India: a systematic review. Lett Spat Resour Sci 16 , 35 (2023). https://doi.org/10.1007/s12076-023-00357-5

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India's Infrastructure Ambitions

Recent case studies.

India is one of the world's fastest-growing economies, and infrastructure will play a massive role in helping the country take a huge development and economic leap. Lately, the sector has attracted intense focus from the government, devising policies for creating a truly best-in-class infrastructure in the country. In August 2021, Mr. Narendra Modi, the Prime Minister of India, announced schemes worth US$ 1.35 trillion dedicated to building state-of-the-art infrastructure that will boost the economy. The Prime Minister, in his address, said that the schemes would give "employment opportunities for hundreds of thousands."

In the Union Budget 2022-23, the government has proposed infrastructure spending of Rs. 10 lakh crore (US$ 0.13 trillion).  This is an increase of almost 35% over the previous year. Investment-wise, Indian Railways have seen a huge spike of 50% YoY in outlays. This entails the proposed development of 100 PM Gati Shakti cargo terminals over the next three years. Additionally, the infrastructure outlay includes expanding the National Highway network by 25,000 km this year. The proposed outlay on housing and ports, and urban infrastructure is flat at FY 2021-22 levels.

According to the Economic Survey of India, the country needs to spend US$ 1.4 trillion every year to reach US$ 5 trillion GDP by FY 2024-25. Thus, to accelerate the efforts to strengthen the country's infrastructure, the National Infrastructure Pipeline (NIP) was launched with a proposed infrastructure outlay of Rs. 111 lakh crore (US$ 1.4 trillion) over a period of FY 2020-25. The scheme also entails attracting both domestic and foreign investments in the sector. The NIP has expanded to more than 9,000 projects (initially 6,835), encompassing 34 infrastructure sub-sectors.

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India’s Urban Infrastructure Needs to Cross $840 Billion Over Next 15 Years: New World Bank Report

A growing urban population will need equivalent investments in urban infrastructure and government sources are not going to be enough. 

NEW DELHI, November 14, 2022 –  A new World Bank report estimates that India will need to invest $840 billion over the next 15 years—or an average of $55 billion per annum—into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population. The report, titled  “Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action”   underlines the urgent need to leverage more private and commercial investments to meet emerging financial gaps.

By 2036, 600 million people will be living in urban cities in India, representing 40 percent of the population. This is likely to put additional pressure on the already stretched urban infrastructure and services of Indian cities – with more demand for clean drinking water, reliable power supply, efficient and safe road transport amongst others. Currently, the central and state governments finance over 75 percent of city infrastructure, while urban local bodies (ULB) finance 15 percent through their own surplus revenues.

Only 5 percent of the infrastructure needs of Indian cities are currently being financed through private sources. With government’s current (2018) annual urban infrastructure investments topping at $16 billion, much of the gap will require private financing. 

“Cities in India need large amounts of financing to promote green, smart, inclusive, and sustainable urbanization. Creating a conducive environment for ULBs, especially large and creditworthy ones, to borrow more from private sources will therefore be critical to ensuring that cities are able to improve living standards of their growing populations in a sustainable manner," said Auguste Tano Kouamé, Country Director, World Bank, India.

The new report recommends expanding the capacities of city agencies to deliver infrastructure projects at scale. Currently, the 10 largest ULBs were able to spend only two-thirds of their total capital budget over three recent fiscal years. A weak regulatory environment and weak revenue collection also adds to the challenge of cities accessing more private financing. Between 2011 and 2018, urban property tax stood at 0.15 percent of GDP compared to an average of 0.3-0.6 percent of GDP for low- and middle-income countries. Low service charges for municipal services also undermines their financial viability and attractiveness to private investment.

Over the medium term, the report suggests a series of structural reforms including those in the taxation policy and fiscal transfer system - which can allow cities to leverage more private financing. In the short term, it identifies a set of large high-potential cities that have the ability to raise higher volumes of private financing.

“The Government of India   can play an important role in removing market frictions that cities face in accessing private financing.   The World Bank report proposes a range of measures that can be taken by city, state, and federal agencies to bend the arc towards a future in which private commercial finance becomes a much bigger part of the solution to India’s urban investment challenge,”  said Roland White, Global Lead, City Management and Finance, World Bank, and co-author of the report. 

World Bank's Roland White on why India needs to tap private sources for financing it's growing urban infrastructure needs.

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Innovative financing: the case of India Infrastructure Finance Company

Director, Department of Financial Services, Ministry of Finance, Government of India

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Swachh Bharat Mission

Key facts and figures

Sector: waste and sanitation, social infrastructure

Phase I: 2014-19

Phase II: 2020-25

Size: US$10bn (phase I), US$18.8bn (phase II)

Location: India, nationwide

Key participants: Government of India, state and local governments

Inadequate household and community sanitation presents a key problem in many developing economies. This is particularly pronounced in India, where a lack of toilets and effective sanitation facilities have meant that open defecation has been a prominent health challenge across much of the country, with large economic and social costs associated with it. The Infrastructure for Good barometer highlights this gap as well, with India seeing the fourth-lowest score across 30 countries for access to sanitation services.

In recognition of this need, the Swachh Bharat, or “Clean India” Mission (SBM), was launched as a nationwide infrastructure campaign by the Indian central government in October 2014. It aims to address the problem of open defecation, improve solid waste management, implement systems for the reuse and recycling of waste generated, and bring about behavioral change with respect to sanitation practices. Phase I ran from 2014 to 2019 (costing an estimated US$10bn) 1 , with Phase II being implemented between 2020-21 and 2024-25 (with a total budget of US$18.8bn). 2

Altogether, the SBM program has been responsible for the construction of 109 million individual household latrines, 3 with more than 280,000 open-defecation free (ODF) villages having been recognized. 4 In urban areas, the initiative helped 4,355 cities become ODF. 5 Phase II’s objectives include implementing solid and liquid waste management for at least 80% of households and all public places (including primary schools, rural homes and rural childcare centers). 6

A social implementation strategy: meeting the needs of diverse communities

Open defecation is a significant problem across rural India, owing to the lack of sanitation infrastructure as well as longstanding habits. To address the social aspects, 8% of the SBM campaign’s total expenditure has been used for information, education and communication activities—an important form of social infrastructure. These have included screening movies and documentaries, social media campaigns, door-to-door outreach and advertisements on television, newspapers and magazines. 7

SBM has also provided extensive training initiatives on toilet construction, management and monitoring to local residents throughout the country. Masons have received training on more cost-effective options like twin-leach pit toilets. Women have also received training to become masons, enabling them to build toilets on their own. Various trainings have been provided via e-learning portals, through which more than 800,000 people have successfully completed certifications. 8

These efforts to be cognizant about local needs and supportive of local implementation are representative of India’s positive scores in the Infrastructure for Good barometer when it comes to engaging and supporting local communities (including indigenous groups) and supporting local skills development related to infrastructure.

Better health outcomes, particularly for poorer, marginalized communities

The SBM initiative has brought significant health benefits to those who need them the most. A recent UNICEF report highlights that ODF villages are much less likely to face problems of fecal contamination of groundwater (by 12.7 times), food (2.2) and soil (1.1) than villages with open defecation. ODF villages have seen direct health impacts, as the implementation of SBM has played a key role in reducing diarrhea, malaria, stillbirths and low birth weight. 9, 10

Even in non-ODF villages, access to household toilets increased significantly for below poverty line households, rising from 68% in 2018 to 88% in 2019, compared with an increase from 75% to 91% among above poverty line households in the same period. 11 At the same time, access to household toilets also improved substantially for India’s most socioeconomically disadvantaged and marginalized groups, 12 rising from 63% to 91% for Scheduled Caste and from 71% to 87% for Scheduled Tribe villagers. 13

Free mixed public toilets in Jaipur, Rajasthan, India.

Socioeconomic upsides for households, workers and businesses

The SBM initiative has spurred a variety of economic benefits, both for households and the broader economy. Economic damages to households caused by poor sanitation have been reduced as a result of lower medical costs, more time saved and more lives saved. By fiscal year 2019/20, these cost savings were estimated to reach an equivalent of 6.65% of GDP annually. And this figure is expected to improve further, reaching 7.74% of GDP by 2023/24 if the safe solid waste management of latrines is fully achieved. 14

Nationwide, improved sanitation facilities have created twice as many financial benefits as the costs involved in their construction and operation. The benefit-cost ratio rises to 3.78:1 when considering the value of lives saved and the appreciation in property values.

Jobs have also been created, both through the SBM initiative and because of its effects on economic activity. The initiative provided direct employment to 2.59 million full-time-equivalent workers, and indirectly to another 4.95 million workers between 2014/15 and 2018/19. It is expected that another 5.63 million workers will be employed by 2023-24, mostly in rural areas. 15

Local economies have seen significant growth in the sanitation input market (materials purchased for constructing and retrofitting toilets), with further growth expected in the sanitation output market (the value of reusable and recyclable waste). The input market grew by 430% between 2015 and 2019 and is expected to grow at least another 330% by 2024, reaching US$24bn. By that time, the output market is expected to be worth US$12bn if 100% of solid waste is treated. 16

Large-scale change through decentralized efforts

Although SBM is a nationwide campaign, the financing costs are shared between the federal and state governments, while its ownership rests with each state, which has the leeway to determine how to decentralize funding further, if at all. 17 In some cases, sanitation credit in the form of small-scale loans through banks and microfinance institutions has also been encouraged, and with the right measures this market could expand significantly, offering important resources for financing renovations, repairs and ensuring the sustainability of ODF in the longer term. 18, 19

Decentralized funding and management have been integral in helping the SBM initiative succeed, with most of the work conducted by local-level administrators who understand local nuances and considerations. This involvement, at all levels, has been key in creating effective sanitation programs across schools, healthcare institutions, public sector buildings and open public spaces.

Given the scale of the initiative, and because its success rests significantly on behavioral change, it has been vital to maintain a high degree of community-level support and monitoring. The SBM program has mobilized more than 600,000 volunteers across communities, educating them on the importance of hygiene and safe sanitation and training them on how to share these messages with others. 20 An effective monitoring mechanism has also been put in place, with the prime minister’s office engaging regularly with the chief ministers of each state to assess progress.

Key learnings

The SBM initiative recognizes that open defecation and sanitation are not just infrastructure issues, but also dependent on habit and behavior. As a result, efforts to address these problems benefit from a multi-pronged approach: providing better physical infrastructure (toilets); instituting an effective, localized waste management model; and establishing educational infrastructure to engage with communities.

Although the SBM initiative has a considerable scope, its decentralized and modular format provides a replicable model for other countries. In fact, the model has already inspired other national campaigns and influenced similar policies in Ethiopia, Indonesia and Nigeria. 21 This model offers a lesson that infrastructure often works better when it is not treated as individual projects, but as part of a system.

The initiative also provides an example of how effective collaboration between national and state governments and ministries, with the successful participation of the community and volunteers, can create social movements focused around the greater good and promote buy-in toward infrastructure programs that pursue those goals.

India is among the lowest scoring countries featured in the barometer, with below average scores across each of the five pillars. Its strongest performance is in Pillar 1: Governance and planning.

Score: 42.9

out of 30 countries

Key findings from the Infrastructure for Good barometer

The inaugural edition of the Infrastructure for Good barometer gives reason for optimism. Countries have put in place strong foundations in infrastructure planning and governance as part of long-standing efforts to encourage investment. However, the barometer also identifies shortfalls: more attention is needed on the specific levers that drive social, economic and environmental progress.

Explore the full data and barometer framework

Compare scores and ranks across 30 countries and all 162 indicators and sub-indicators that form the Infrastructure for Good barometer.

Scheduled Castes (SCs) and Scheduled Tribes (STs) in India are the most socio-economically disadvantaged groups in India, as recognized by the Indian government.

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Urban Blue-Green Conundrum: A 10-City Study on the Impacts of Urbanization on Natural Infrastructure in India

This paper discusses impacts of urbanization on natural infrastructure in India’s 10 most populated. Urbanization today is disconnected from the natural environment causing negative outcomes, such as water scarcity, increased groundwater stress, and urban flooding. Using scientific evidence to accurately identify the correlations between urbanization, loss of natural infrastructure, and increasing climate shocks and stresses can enable the state and municipal authorities to strengthen urban planning and development in the future.

This Working Paper is part of WRI India's Freshwater , and WRI Ross Center for Sustainable Cities . Reach out to an Initiative Expert for more information.

An increase in paved surfaces such as roads and buildings irreversibly changes natural infrastructure, ecosystems, and hydrological surface and subsurface flows in urban areas. The loss of natural infrastructure has complex interlinked consequences such as reduced groundwater recharge leading to dropping aquifer levels and increased rainwater runoff leading to higher flood risk. In addition, the high pressure of development in and around urban centers leads to new development being sited on high-risk, vulnerable zones such as floodplains, lake beds, and low-lying areas.

In this working paper, we examine the relationship between urbanization (increase in built-up area) and natural infrastructure change (in blue-green cover) across India’s 10 most populated cities. We look at all development in the urban region, not distinguishing between formal and informal settlements.

We recommend that state and city authorities adopt an integrated urban blue-green approach to urban planning and development regulation using spatial and on-ground evidence to conserve and restore natural spaces, water bodies, aquifers, and other ecosystems to increase urban resilience.

Key Findings:

Between 2000 and 2015, the built-up area in these 10 cities increased on average by 47 percent and 134 percent within 0–20 km of the city center (core) and 20–50 km (periphery), respectively.

Surface water lost across the 10 cities between 2000 and 2015 is estimated to be 307 sq. km (square kilometers), a 15 percent decrease.

It is estimated that 44 percent (1,177 sq. km) of new development between 2000 and 2015 has come up on areas with high or very high recharge potential (in the 0–50 km urban region of the 10 study cities).

Executive Summary:

Urbanization all over the world is typically associated with increases in the spatial extent of urban built-up areas. India remains an urbanizing nation and is expected to double its urban population from about 400 million in 2018 to about 800 million by 2050. The extent of urban areas is set to increase dramatically to support the growing population, with estimates suggesting that 70 to 80 percent of the infrastructure needed in 2030 is yet to be built. All this new construction will have profound and far-reaching impacts on urban centers and their surroundings. However, there is limited research and forecasting on how these new developments interact with and impact natural infrastructure and ecological and hydrological systems.

About This Working Paper

This working paper seeks to expand our knowledge of urbanization and its impacts on the surrounding natural landscapes in India. We study the urbanized region of India’s 10 most populated cities to examine the relationship between urban (built-up) expansion and changes in blue-green infrastructure such as surface waters, green cover, and recharge zones. Improving the interactions between urbanization and natural infrastructure in these 10 cities can significantly impact the well-being of about 30 percent of India’s urban population.

Remote sensing data and satellite imagery are used to monitor urbanization and changes in blue-green infrastructure between 2000 and 2015 in the 10 study cities. The cities studied are Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Jaipur, Kolkata, Mumbai, Pune, and Surat. The correlation between urbanization and natural infrastructure is studied in two spatial intervals of 20 km (0–20 km) and 50 km (20–50 km) from the center of each of the study cities.

Thumbnail image by Mike Prince/ Flickr

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• DOI : 10.23846/DPW1IE114

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Case Study: India

Most improved country: governance.

Reform to India’s insolvency proceedings and recovery rates has driven India’s 18 rank increase on governance measures in InfraCompass.

In 2015, the World Bank Doing Business Report ranked India 136th for resolving insolvency, with a recovery rate of 25.7 cents per dollar. [1]   In October 2016, the Insolvency and Bankruptcy Board of India (IBBI) was created, under the Insolvency and Bankruptcy Code (IBC). The IBBI is responsible for the implementation and regulation of the Code, which consolidates and amends the legislations and regulations related to reorganisation and insolvency resolution of corporations. [2]   The Code sets out the corporate insolvency resolution process with the aim to balance the interests of all stakeholders.

In 2019, the Insolvency and Bankruptcy Code Act was amended to provide creditors of the loan defaulting companies with authority over the distribution of proceeds in the resolution process. It also provided further clarity on order of priority for the distribution of liquidation assets. [3]

Although IBC was developed just prior to InfraCompass 2017, it has taken a few years to realise the positive impact of the reform. At the National Company Law Tribunal, the time taken to resolve insolvencies is 1.5 years, compared to over four years prior to the IBC. Impressively, India’s recovery rate is almost 72 cents on the dollar now, compared to 26 cents in 2016.

Consequently, India’s ranking in the World Bank Ease of Doing Business Index has also improved by 67 places from 2016 to 2020. This is mostly attributed to the sharp improvement in its ranking in resolving insolvency, which is one of the seven indicators that underpin the index. In resolving insolvency, India jumped up 84 places since 2016, from 136 to 52, out of 190 countries. [4]   The Code is expected to be a major driver in the increase of mergers and acquisitions in India, including in infrastructure assets, as bidders will eagerly look to acquire stressed assets.

India’s inclusive innovation can shape the world’s digital future

• Our digital public infrastructure is built on design principles emphasizing interoperability and inclusive scalability from the outset. It could be a valuable case study for the world on how best to build inclusive technology in the age of artificial intelligence.

At a time when the world is grappling with shifting global narratives and macroeconomic challenges, India is experiencing a remarkable transformation. Strong demand, resilient supply chains, relentless innovation, rapid digitization at scale, energetic entrepreneurship and a conducive policy-and-investment climate are shaping a new wave of global optimism over India. From governments across Europe and the US to power centres in the Global South, India’s name resonates in discussions on alliances and strategic partnerships. ‘Incredible India’ is now being seen as ‘Inevitable India.’

Hence, it’s no surprise that Goldman Sachs forecasts that India could become the world’s second-largest economy by 2075, with its GDP potentially reaching $52.5 trillion, trailing only China’s projected $57 trillion. EY predicts that India’s GDP will grow sixfold to $26 trillion by 2047, the 100th year of Independence, while Martin Wolf of the Financial Times sees India’s purchasing power surpassing that of the US by 30% by 2050.

But the narrative of an ‘Inevitable India’ isn’t just about numbers. It’s about a qualitative and inclusive digital transformation reshaping the nation’s social, economic and cultural fabric. With over 1.2 billion internet users, the third-largest startup ecosystem, a $250 billion technology industry and a 5 million-plus technology workforce, India is transforming itself into a young, vibrant and tech-savvy digital economy where no one is left behind. That is the real highlight of India.

Innovation in the West often caters to the top of the pyramid, focusing on the best before trying to reach out to the rest. India, however, has forged its own path in innovation, starting from the bottom and working its way up. This approach is incredibly challenging, especially given the complexities of a billion-plus population, diverse languages and cultures, and high levels of illiteracy at the grassroots. Many experts dismissed it as a ‘Mission Impossible.’ Yet, India has defied those odds to make it possible.

Over the past decade, India has invested well in creating the world’s largest Digital Public Good (DPI) infrastructure, establishing digital highways that connect the entire country and facilitate the delivery of essential services—from financial transfers to life-saving vaccines. This infrastructure is built on robust design principles, emphasizing interoperability, an open ecosystem and inclusive scalability from the outset.

India’s DPI could serve as a valuable case study for the world on how best to build inclusive technology in this age of artificial intelligence (AI). It demonstrates the importance of prioritizing open ecosystem-driven approaches (making it hard for monopolies to emerge), interoperability and inclusivity right from the start. This has become even more essential as AI continues to advance rapidly, promising to reshape almost everything it impacts, from global supply chains to the dynamics of global leadership and influence.

It is heartening to see these principles being applied to the recently launched India AI Mission. Government support for the development of local compute capacity, data systems, models, use cases and talent underlines the need for India to democratize AI from the very onset.

In sum, the true measure of India’s technological prowess lies not just in its success stories, but in the way we have harnessed technology at scale to address the pressing needs of our vast and diverse population. Most importantly, in the way we have driven innovation to solve last-mile challenges so that nobody is left out of the benefits that a digital economy has to offer.

In India, we do not obsess about technology. We obsess about what it can do and the impact it can create at scale. This is the single biggest lesson the world must learn from India.

As we move beyond hype and towards reality, the next few years will be dedicated to harnessing AI’s capabilities and putting them to work. Our primary focus will be on identifying significant problems that AI can solve, and deploying it at scale. This shift will prioritize return-on-AI-investment, with a growing emphasis on governance and security as such technology becomes pervasive.

This is where India’s DPI learnings can be of value to other countries. Impact creation has long been the focus of India’s digital transformation journey. From using deep-tech, satellite imagery and AI to improve agricultural productivity to deploying tele-medicine solutions to bring healthcare to the remotest corners of the country, India has demonstrated how technology can be a powerful tool for inclusive growth.

As many countries grapple with an economic slowdown and productivity decline, they are expected to adopt AI at scale to boost output. India is prominently positioned to help shape AI roadmaps that focus on inclusion and public impact. Learning from the development and population-scale deployment of technologies like Co-Win for vaccination and the Unified Payments Interface (UPI) for online bank transfers, India offers a narrative in which digital facilities are offered by a broad ecosystem and not by private monopolies. From climate change to healthcare for all, this approach can tackle some of the world’s steepest challenges.

As I look at the future, I see an India that is not only a tech superpower, but also a beacon of hope for technology resilience, innovation and determination. In other words, an India that is inevitable and unstoppable.

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