The current year, 2023, will see India investing more in its Infrastructure. Times of India reports that to make the country more self-sufficient and able to withstand the looming recession, it aims to raise capital spending on Infrastructure as envisioned in its 2023 Union Budget.
The article points to the country’s strengths as a “stable political environment, vaccine and food security, digital ambitions, a strong regulatory structure for the financial sector, and above all, a solid domestic consumption-based economy,” not to mention growing its economic size from the tenth to fifth in the world, which can be used as leverage for increasing its infrastructure investments.
India plans to increase infrastructure investments by 33% for 2023-2024, or 3.3% of its GDP, substantially boosting tax rebates. The article notes that the figure represents a rise in capital infrastructure investment in the country, which is also unprecedented. Doing so will also open new job opportunities for its 600 million employable population between 18 and 35 years old. Work opportunities will bring new income sources and further increase consumer spending in the country.
Big investment projects include 50 additional airports, helipads, water aerodromes, and advanced landing fields, which will help improve logistics while simultaneously cutting costs.
All-in-all, it is envisioned that this infrastructure-infused development will be crucial for lowering delivery costs, facilitating physical mobility for both people and things, removing productivity barriers, and boosting competitiveness, the article notes.
India’s growing EV uptake
There is also another remarkable shift that is happening in India. According to The Economist, the country’s uptake of electric vehicles is also impressive. Still, by EV, it is not the racy images of Elon Musk’s Tesla that come to mind in wealthier economies, but two-wheeler or three-wheeler ones.
Over 70% of all vehicles in India are two-wheeler scooters and motorcycles; three-wheeled autorickshaws account for another 10%. These two types of cars, considered the chariots of the middle class, represent 92% of EVs registered in India, and the uptake rate is expected to increase.
The article notes that the rapid growth of EV uptake in India results from government incentives for producers and consumers.
“In 2013, the then Congress-led government launched the first national scheme—the National Electric Mobility Mission Plan—to push EVs. Two years later, Narendra Modi, then the prime minister, launched a demand-incentive scheme known by the acronym FAME, with an expanded second phase in 2019. Most state governments subsidize purchases, too.”
A lack of transmission lines has held back renewable electricity in India. The IEEFA reports that the government plans to invest $30 billion in new transmission infrastructure to connect renewable generation as it aims to triple its clean-power capacity by 2023.
Their power ministry announced that infrastructure investment would pay for solar plants in India’s sun-drenched deserts of Rajasthan and Gujarat and wind farms in Tamil Nadu to the national network. This will help grow the country’s inter-regional transmission capacity from 112 gigawatts to 150 gigawatts by the end of the decade.
“The transmission plan includes building transformers and high voltage lines to carry power long distances, as well as laying submarine cables to ship electricity from offshore wind projects.”
“The transmission plan includes building transformers and high voltage lines to carry power long distances, as well as laying submarine cables to ship electricity from offshore wind projects.”
The increase in EV uptake in India could help the country reduce its crude oil imports, which are currently at over 85% and account for 24% of its import bill in 2021-2022.
Aside from slashing its import bill and energy dependence, the rising number of EVs on India’s roads could also bring significant health benefits as internal combustion engines emit hazardous particles known as PM2.5. This fine particle can get into the deep parts of the lungs and even the bloodstream.
Long-term exposure to these particles is associated with increased rates of chronic bronchitis, reduced lung function, and increased mortality from lung cancer and heart disease (Department of Health, 2018).
One study estimates they contribute up to 35% of these lung-burning particles in the dirty air of Indian cities, the article says.
Source:
Gupta, V. (2023, May 6). FY 2023 is the determining year for India’s future Infrastructure. The Times of India. Retrieved from https://timesofindia.indiatimes.com/blogs/voices/fy-2023-is-the-determining-year-for-indias-future-infrastructure/
Forget Teslas, India’s EV revolution is happening on two wheels. (2023, April 20). The Economist. Retrieved from https://www.economist.com/asia/2023/04/20/forget-teslas-indias-ev-revolution-is-happening-on-two-wheels?
India to invest $30 billion in new transmission infrastructure to bring renewable energy to market. (2022 December 8). Institute for Energy Economics and Financial Analysis. Retrieved from https://ieefa.org/articles/india-invest-30-billion-new-transmission-infrastructure-bring-renewable-energy-market
Fine Particles (PM 2.5) Questions and Answers. (2018, February). NY State Department of Health. Retrieved from https://www.health.ny.gov/environmental/indoors/air/pmq_a.htm#
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