Infrastructure plays a huge role in propelling other industries and India’s overall development. The government therefore focuses on the development of infrastructure and construction services through focused policies such as open FDI norms, large budget allocation to infrastructure sector, smart cities mission, etc.
The following Categories fall under Infrastructure Sector:
- Real Estate
- Infrastructure Funds
- Road Transport
- Smart City
The Construction industry in India consists of the Real estate as well as the Urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others. While Urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare.
100% FDI under automatic route is permitted in completed projects for operations and management of townships, malls/shopping complexes, and business constructions.
100% FDI is allowed under the automatic route for urban infrastructures such as urban transport, water supply and sewerage and sewage treatment.
The real estate sector is one of the most globally recognized sectors. Real estate sector comprises four sub sectors – housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.
It is also expected that this sector will incur more non-resident Indian (NRI) investments in both the short term and the long term. Bengaluru is expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
Infrastructure funds provide the opportunity to invest in essential public assets, such as toll roads, airports and rail facilities.
They are often attractive to investors looking for predictable returns, as infrastructure projects are typically characterised by low levels of competition and high barriers to entry. Some have the prices they charge subject to government regulation, with price increases requiring approval.
Infrastructure funds are managed by specialist fund managers, who make investment decisions on behalf of investors.
India has the one of largest road network across the world, spanning over a total of 5.5 million km. This road network transports 64.5 per cent of all goods in the country and 90 per cent of India’s total passenger traffic uses road network to commute. Road transportation has gradually increased over the years with the improvement in connectivity between cities, towns and villages in the country.
The Union Minister of State for Road, Transport and Shipping has stated that the Government aims to boost corporate investment in roads and shipping sector, along with introducing business-friendly strategies that will balance profitability with effective project execution. According to data released by the Department of Industrial Policy and Promotion (DIPP), construction development including Townships, housing, built-up infrastructure and construction-development projects attracted Foreign Direct Investment (FDI) inflows worth US$ 25.05 billion were recorded in the construction development^ sector between April 2000 and March 2019.
The objective of the Smart Cities Mission is to promote cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ solutions.
The core infrastructure elements in a smart city would include:
1. Adequate water supply
2. Assured electricity supply
3. Sanitation, including solid waste management
4. Efficient urban mobility and public transport
5. Affordable housing, especially for the poor
6. Robust IT connectivity and digitization
7. Good governance, especially e-Governance and citizen participation
8. Sustainable environment
9. Safety and security of citizens, particularly women, children and the elderly
10. Health and education
India’s Micro, Small, and Medium Enterprises (MSMEs) base is the largest in the world after China. The sector provides a wide range of services and is engaged in the manufacturing of over 6,000 products – ranging from traditional to hi-tech items.
Given the government of India’s latest ‘Make in India’ push, along with a significant jump in the FDI flows, the Indian MSMEs sector is poised for rapid growth and integration with major global value chains.
As per the official estimates, there are about 63.05 million micro industries, 0.33 million small, and about 5,000 medium enterprises in the country.
The state of Uttar Pradesh has the largest number of estimated MSMEs with a share of 14.20 percent of the total MSMEs in the country. West Bengal comes as close second with a share of 14 percent, followed by Tamil Nadu and Maharashtra at eight percent.
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, governs the coverage and investment ceiling of MSMEs in India.
Some rules have been made for MSME industries by the Ministry of Micro, Small and Medium Enterprises, Government of India. Whatever the rules, regulations and laws related to micro, small and medium industries present in the country and this ministry is the supreme body or institution for the formulation of new laws when required. The economic strength, hope and business of every country rests more on the young entrepreneur. The Government of India provides the facility of easy registration to MSMEs, keeping in mind that small and big business organizations do not face difficulties in their business.