The paradox of India’s infrastructure

Is a lack of physical infrastructure holding India back? Yes – and no.

While the physical amount of key elements of infrastructure in India benchmark well internationally, the on-the-ground perception for many is that its infrastructure is vastly deficient.

To see if this paradox could be resolved, we studied both the quantity of infrastructure in place and the quality of that stock.

The answer is nuanced.

India needs more infrastructure in some key sectors and better quality in others. Either way, the demand on public and private sector balance sheets to finance the required investments in greenfield projects and upgrading activities will be considerable. So too will be the associated demand for steel – with infrastructure demand expected to increase at an approximate rate of 8%, compound, between 2016 and 2025.

Does India just need more infrastructure?

India’s infrastructure has been much maligned, with descriptions such as ‘insufficient’ freely dispersed by both local experts and international observers. Popular consensus would imply that what the nation has achieved to date, such as halving the country’s poverty rate since the early 1990s¹, has been achieved despite its infrastructure.