New Delhi: India should maintain its investment momentum in infrastructure, positioning it as a central pillar of the country’s medium-term growth strategy, and a key enabler of its vision to become a developed nation (Viksit Bharat) by 2047, the Economic Survey 2025-26 said on Thursday.
The survey said that higher public capital expenditure is also crowding in private investment. Deeper private participation, along with infrastructure aligned with emerging priorities such as decarbonisation, digitalisation and resilience, will be critical to achieving the country’s long-term development goals.
Public spending on infrastructure has a high multiplier effect, estimated by studies to be around 2.5 to 3.5 times the gross domestic product (GDP) over the medium term. This means, for every rupee spent by the government in creating infrastructure, GDP gains worth ₹2.5- ₹3.5 accrue.
Spending surge
The government has steadily raised public investments in infrastructure since FY20. It has risen from ₹5.92 trillion in FY22 to ₹11.21 trillion (budget estimate) in FY26.
“A major element of this shift has been the substantial increase in public capital expenditure. Between FY19 and FY22, the Government of India’s capital expenditure increasedby 92%, from ₹3.07 lakh crore to ₹5.92 lakh crore. This momentum has been sustained over the subsequent fiscal years, reinforcing the objective of expanding access to quality infrastructure across the country,” the survey said, highlighting the need to maintain strong public capex support and attract private investment through PPP programmes, asset monetization and other capital market instruments such as infrastructure investment trusts (InviTs) and real estate investment trusts (Reits).
The scale and consistency of this investment momentum have positioned infrastructure as a cornerstone of India’s growth engine, the survey said. Now, it is time for the private sector to take up the investment baton, with the government supplementing its own efforts with wholehearted acceptance of the need for public-private partnerships (PPPs) in the country’s infrastructure sector, the survey added.
The survey expects the Indian economy to grow at 6.8%-7.2% in FY27, supported by strong macro fundamentals and a series of regulatory reforms. This comes on top of a 7.4% expansion projected for the ongoing financial year ending 31 March.
The survey, prepared under the leadership of India’s chief economic advisor V. Anantha Nageswaran, also said that the concept of infrastructure is evolving beyond physical networks to encompass digital public infrastructure, clean energy systems, resilient water management and future-ready technologies. This expanded infrastructure base is also enhancing productivity, competitiveness, innovation and sustainability across the economy, said the Survey.
“India’s infrastructure strategy over 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 have begun to yield tangible efficiency gains—shorter travel times, faster freight movement, improved logistics performance and wider access to essential services. The institutionalisation of integrated planning through PM Gati Shakti, alongside reforms in financing, asset monetisation and public–private partnerships, has strengthened project preparation and execution while crowding-in private investment,” the survey said.
The phase of increased investment in infrastructure has been characterised not only by rapid asset creation, but also by a shift towards integrated, system-level development. A defining feature of this transition has been the institutionalisation of multimodal planning through PM Gati Shakti, complementedby the National Logistics Policy and digital platforms that are reducing transaction costs and execution risks. Reforms in infrastructurefinancing—spanning project finance regulation, PPP frameworks, asset monetisation and capital market instruments—are crowding in private investment, said the survey.
India’s roads and highways sector is moving 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 strengthening capacity and reliability.
This infrastructure-led push is central to reducing logistics costs, easing congestion and improving connectivity, said the survey.
With regards to the railways, the survey noted that continued focus on dedicated freight corridors, economic rail corridors under PM Gati Shakti, and modern signalling and station infrastructure is improving throughput, reliability and multimodal integration. On shipping, the survey said that PPP and captive operators are projected to handle 80% of all cargo at major ports by 2030.
A pipeline of 48 PPP projects worth approximately ₹23,000 crore (excluding the development of Vadhvan port project in Maharashtra worth ₹76,220 crore) has been identified for the next five years (FY26-FY31). These projects will further enhance the capacity and efficiency of India’s Major Ports.