Morgan Stanley Forecasts 15.3% Annual Increase in India’s Infrastructure investments Over Next Five Years

India's Infrastructure Investments to Surge by 15.3% Over Next Five Years: Morgan Stanley

Investment banking giant Morgan Stanley has projected a substantial growth in India’s infrastructure investments, forecasting a compound annual growth rate (CAGR) of 15.3% over the next five years. This significant increase is expected to result in a cumulative expenditure of $1.45 trillion (₹121.16 lakh crore) by 2028.

In its latest report titled “The New India – Infrastructure,” Morgan Stanley highlighted that this surge in infrastructure spending is set to boost India’s investment rate, fostering a prolonged period of high productive growth. The report underscores that infrastructure investment is fundamental to any economy’s growth, and India has made notable strides in this area over the past decade. However, there remains considerable potential for further expansion and productivity enhancement.

The report emphasizes that recent government policies have been instrumental in paving the way for increased infrastructure investments. Specifically, the Prime Minister’s Gati Shakti initiative, also known as the National Master Plan for Multi-modal Connectivity, is poised to accelerate the execution of infrastructure projects while curbing cost overruns. This centralized and well-orchestrated approach is expected to unlock significant productivity gains and enhance efficiency.

Morgan Stanley’s report outlines the four key macroeconomic implications of this growth in infrastructure spending: a profit boom driven by increased capital expenditures (capex), enhanced macroeconomic stability, improved efficiency and productivity, and sustained long-term growth. The anticipated increase in infrastructure investment is expected to positively impact the equity market, benefiting enablers, developers (or asset owners), and adopters alike.

Furthermore, the global brokerage firm predicts that infrastructure investment will rise from 5.3% of GDP in the financial year 2023-24 to 6.5% of GDP by 2028-29. This growth trajectory signifies a robust commitment to enhancing the country’s infrastructure landscape, ultimately contributing to India’s overall economic stability and growth.

The report concludes by reaffirming the crucial role of infrastructure investment in driving economic growth and productivity. With the government’s strategic initiatives and Morgan Stanley’s optimistic projections, India is poised to experience a transformative phase of infrastructure development in the coming years.

Sources By Agencies

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