Economic Survey 2025-26 Positions Infrastructure as Growth Engine for Viksit Bharat Vision
New Delhi: India must sustain its investment momentum in infrastructure, establishing it as a central pillar of the country's medium-term growth strategy and a crucial enabler of its vision to become a developed nation (Viksit Bharat) by 2047, according to the Economic Survey 2025-26 presented on Thursday. The comprehensive document underscores that higher public capital expenditure is effectively crowding in private investment, creating a synergistic effect that propels economic advancement.
Public Spending's Powerful Multiplier Effect
The survey highlights that public spending on infrastructure possesses a substantial multiplier effect, with studies estimating it to be approximately 2.5 to 3.5 times the gross domestic product (GDP) over the medium term. This translates to a significant economic gain: for every rupee expended by the government in infrastructure creation, GDP benefits worth ₹2.5 to ₹3.5 are generated, amplifying the impact of fiscal investments.
Sustained Investment Surge and Private Sector Role
Since FY20, the government has consistently elevated public investments in infrastructure, witnessing a remarkable rise from ₹5.92 trillion in FY22 to a budget estimate of ₹11.21 trillion in FY26. A pivotal element of this strategic shift has been the substantial 92% increase in the Government of India's capital expenditure, soaring from ₹3.07 lakh crore in FY19 to ₹5.92 lakh crore in FY22. This momentum has been maintained over subsequent fiscal years, reinforcing the objective of expanding access to quality infrastructure nationwide.
The survey emphasizes the necessity to preserve robust public capital expenditure support while actively attracting private investment through public-private partnership (PPP) programmes, asset monetization, and innovative capital market instruments such as infrastructure investment trusts (InvITs) and real estate investment trusts (REITs). It asserts that the scale and consistency of this investment momentum have firmly positioned infrastructure as a cornerstone of India's growth engine.
Now, the survey advocates for the private sector to assume the investment baton, with the government supplementing its efforts through wholehearted acceptance and facilitation of PPPs in the infrastructure sector. This collaborative approach is deemed critical for achieving the nation's long-term development objectives.
Evolving Infrastructure Concept and Economic Growth Projections
The concept of infrastructure is evolving beyond traditional physical networks to encompass digital public infrastructure, clean energy systems, resilient water management, and future-ready technologies. This expanded infrastructure base is enhancing productivity, competitiveness, innovation, and sustainability across the economy, as noted in the survey prepared under the leadership of India's Chief Economic Advisor, V. Anantha Nageswaran.
Supported by strong macroeconomic fundamentals and a series of regulatory reforms, the survey projects the Indian economy to grow at 6.8% to 7.2% in FY27. This follows a projected 7.4% expansion for the ongoing financial year ending 31 March, indicating sustained economic vitality.
Integrated Planning and Sector-Specific Advancements
India's infrastructure strategy in recent years reflects a decisive shift towards scale, integration, and quality, with sustained public capital expenditure acting as a powerful catalyst for growth. Coordinated investments across roads, railways, ports, civil aviation, energy, digital, and rural infrastructure are yielding tangible efficiency gains, including shorter travel times, faster freight movement, improved logistics performance, and wider access to essential services.
The institutionalization of integrated planning through PM Gati Shakti, alongside reforms in financing, asset monetization, and public-private partnerships, has strengthened project preparation and execution while crowding in private investment. This phase is characterized not only by rapid asset creation but also by a transition towards integrated, system-level development.
A defining feature of this transition is the institutionalization of multimodal planning through PM Gati Shakti, complemented by the National Logistics Policy and digital platforms that reduce transaction costs and execution risks. Reforms in infrastructure financing—spanning project finance regulation, PPP frameworks, asset monetization, and capital market instruments—are effectively mobilizing private capital.
Progress in Key Infrastructure Sectors
In the roads and highways sector, the focus is shifting from rapid network expansion towards greater logistics efficiency and quality. Sustained capital investment, expansion of high-speed corridors, multimodal integration under PM Gati Shakti, and reforms in project delivery are enhancing capacity and reliability. This infrastructure-led push is central to reducing logistics costs, easing congestion, and improving connectivity.
Regarding railways, continued emphasis on dedicated freight corridors, economic rail corridors under PM Gati Shakti, and modern signaling and station infrastructure is improving throughput, reliability, and multimodal integration. In shipping, PPP and captive operators are projected to handle 80% of all cargo at major ports by 2030.
A robust pipeline of 48 PPP projects, valued at approximately ₹23,000 crore (excluding the development of the Vadhvan port project in Maharashtra worth ₹76,220 crore), has been identified for the next five years (FY26-FY31). These initiatives are set to further augment the capacity and efficiency of India's Major Ports, reinforcing the nation's trade and logistics capabilities.
The Economic Survey 2025-26 concludes that deeper private participation, coupled with infrastructure aligned with emerging priorities such as decarbonization, digitalization, and resilience, will be indispensable for realizing India's long-term development aspirations and achieving the Viksit Bharat vision by 2047.
