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Morgan Stanley predicts 15.3% CAGR in Indian infrastructure investments for next 5 years

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In Short:

A recent report by investment banking company Morgan Stanley predicts a 15.3% annual growth rate in infrastructure investments in India, leading to a total expenditure of USD 1.45 trillion over the next five years. This surge in investment is expected to boost productivity and economic growth significantly. The report highlights the government’s efforts to improve infrastructure and increase efficiency, particularly through the Prime Minister Gati Shakti scheme.

Get ready for a boom in infrastructure investments in India!

New Delhi: Investment banking company Morgan Stanley has some exciting news – they are anticipating a 15.3 per cent compound annual growth rate (CAGR) in infrastructure investments in India. This growth is projected to result in a whopping cumulative expenditure of USD 1.45 trillion over the next five years.

What does this mean for India?

This surge in investment is not just about money – it’s about boosting the investment rate and fostering a prolonged period of high productive growth, according to the global investment company’s recent report, The New India – Infrastructure.

Why is infrastructure investment crucial?

Morgan Stanley highlighted the importance of infrastructure investment, calling it the backbone of any economy. India has been increasing its investments in infrastructure over the past decade and has been working on improving productivity. But there’s still room for growth, and recent government policies have been a positive step in the right direction. With a 15.3 per cent CAGR expected in infrastructure investments, the future looks promising.

How will the Prime Minister’s initiative impact infrastructure projects?

The report also mentioned Prime Minister Gati Shakti, also known as the National Master Plan for Multi-modal Connectivity. This initiative is expected to speed up the execution of infrastructure projects while controlling costs. It will unlock productivity gains and enhance efficiency, according to the global brokerage.

What are the key impacts of this growth in infrastructure spending?

The global brokerage outlined four key macroeconomic implications of the increase in infrastructure spending: a profit boom driven by increased capital expenditures, enhanced macroeconomic stability, improved efficiency and productivity, and more sustained growth.

How will the market be affected?

The report highlighted the positive impacts on the equity market, benefiting enablers, developers (or asset owners), and adopters. So, it’s not just about infrastructure – the market will also see some positive effects.

What can we expect in the coming years?

Morgan Stanley anticipates infrastructure investment to increase from 5.3 per cent of GDP in financial year (FY) 2024 to 6.5 per cent of GDP by FY 2029. So, get ready for some exciting changes and developments in the infrastructure sector!

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