According to research firm, Dun & Bradstreet, despite the current global financial crisis, India is likely to grow by 8 per cent in 2008-09 supported by strong growth during the April-August period, and the composite business optimism index for Q4 2008 which is 138.9 points.

The development of India’s infrastructure is the key to sustaining this growth rate. The 2008 budget has earmarked power (especially coal), national highways and rural infrastructure as the main beneficiaries of government spending. The Indian government plans to invest US$ 320 billion for the upgradation of ports, railroads, highways and airports over the next 15 years. About US$ 12 billion has been exclusively assigned for the development of ports in the five-year plans for 2001-2012. The government plans to attract private players through public-private partnerships (PPP) for the development of over 300 airports and airstrips.

The Civil Aviation Ministry plans to develop 35 Greenfield airports across India by 2010 with an investment of US$ 35 billion for the proposed airports.

With the country’s burgeoning import and export industry, investment is flowing into India's port sectors. Significant expansion is taking place across India's power sector. A number of Ultra Mega Power Projects (UMPPs) have been initiated to increase India's power generating capacity.

The index of six core-infrastructure industries with a collective weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 242.3 (provisional) in May 2008 and posted a growth of 3.5 per cent (provisional) against a growth of 7.8 per cent in May 2007. For the period April-May 2008-09, six core-infrastructure industries saw a growth of 3.5 per cent (provisional) as against 6.9 per cent during the corresponding period of the previous year.

• Coal production increased by 9.3 per cent (provisional) during April-May 2008-09 against 0.5 per cent during the same period of 2007-08.
• Electricity generation increased by 1.7 per cent (provisional) during April-March 2008-09 against 9.0 per cent during the same period in 2007-08.
• Crude oil production saw a growth of 2.1 per cent (provisional) during April-May 2008-09 against (–) 0.1 per cent during the same period of 2007-08.
• Petroleum refinery production saw a growth of 2.1 per cent (provisional) during April-May 2008-09 against 15.0 per cent during the same period of 2007-08.
• Finished (carbon) Steel production increased by 4.5 per cent (provisional) during April-May 2008-09 against an increase of 5.6 per cent during the same period of 2007-08.
• Cement production increased by 5.4 per cent (provisional) during April-March 2008-09 against an increase of 7.8 per cent during the same period of 2007-08.

Growth Potential

According to the consultation paper circulated by the planning commission, a massive US$ 494 billion of investment is proposed for the eleventh plan period (2007-12), which would increase the share of infrastructure investment to 9 per cent of GDP from 5 per cent in 2006-07. This translates roughly into US$ 40 billion annual additional investment.

For this, the government has already enacted many proactive measures like opening up a number of infrastructure sectors to private players, permitting FDI into various sectors, and introducing model concession agreements.

Some of the projects planned during the eleventh plan include:

Electricity

• Adding power generation capacity of about 70,000 MW
• Providing electricity to all un-electrified hamlets and all rural households through the Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY).