As India strengthens its position as a major global economy, the need for strong and modern infrastructure has become paramount. In fact, this sector is the undeniable backbone of any developing economy, making a direct contribution to the GDP. Consequently, the centre has championed infrastructure creation through a series of transformative initiatives. The PM Gati Shakti National Master Plan streamlines planning and execution, while programs like Bharatmala and Sagarmala Pariyojana are fundamentally reshaping road and port connectivity. The nation is also heavily investing in dedicated freight corridors, high-speed rail systems, and the development of greenfield airports, ports, and metro networks. And supercharging these diverse efforts is the National Infrastructure Pipeline (NIP), designed to ensure rapid and continuous development across the board.
Doubling down on development via coordinated strategies
Back in 2019, a task force was constituted to draw up the NIP for each year from 2019-20 to 2024-25. This was a decisive step that set the ball rolling for the centre’s goal of becoming a $5 trillion economy by 2025. Recognising that India needed to substantially increase its infrastructure investment beyond the $1.1 trillion spent during 2008-17, the NIP was launched with an initial Rs 111 trillion pipeline, specifically targeting projects worth Rs 1 billion and above.
However, NIP, as a standalone initiative, was not deemed sufficient for a developing economy like India. Naturally, many complementary policy and financial moves were made. Key moves included the launch of the PM Gati Shakti Portal and the National Single Window System; and increasing the capital expenditure for all states. Asset monetisation also gained prominence. This led to the launch of the National Monetisation Programme in 2021.
It was around this time that the government acknowledged the limitations of relying too heavily on banks for long-term infrastructure loans, and the need for different financing mechanisms in sync with project reality. This led to the decision to create specific institutional structures. Consequently, the government proposed the setting up of a development finance institutions in the Union Budget 2021-22. From that vision emerged the National Bank for Financing Infrastructure and Development, with an initial corpus of Rs 200 billion. Fast forward to now – this lender has grown and helped shrink the sector’s financing gap. In fact, a Rs 700 billion fundraising plan is in place for 2025-26, with a sanction target of Rs 1.6 trillion. Going even further, the lender plans to have an asset base of around Rs 4 trillion by 2028-29.
Catching up with progress and capacity additions
When the NIP debuted, around 6,800 (economic and social infrastructure) projects were launched at an investment of Rs 111 trillion. However, this was just the beginning. As India’s developmental needs grew, so did the scale of the pipeline. By 2021, the project count had escalated to 7,400, an early sign of the growing ambition. A year later, the trend continued unabated and the number increased to 9,288. Correspondingly, the overall investment outlay experienced a dramatic surge. Back when the pipeline was launched, around Rs 3 trillion worth of projects was anticipated to be added. However, more and more infrastructure sub-sectors came in, adding to the volume and value of projects. In fact, in 2024 alone, around 3,500 more projects were added along with an additional Rs 25 trillion earmarked for their implementation. Now, the overall investment has shot up to around Rs 160 trillion. More interestingly, around 22 more sub-sectors have been added, taking the total number of sectors to 79, as of March 2025. This has made NIP coverage wider for investors and contractors. Moreover, the construction sector has received a shot in the arm from the execution of this mega project pipeline. Currently, around 2,600 projects worth Rs 49 trillion are in the conceptualisation stage.
The pipeline in practice
Although the original plan called for regular reviews and mid-course corrections, tracking the pipeline’s overall progress has been challenging. It is no surprise that rapid development has continued. Even before the NIP’s formal launch, budgetary allocation for infrastructure was in the fast lane. To put numbers into perspective, support from the centre for capital expenditure of state governments and institutions increased by 31.6 per cent between 2021-22 and 2022-23.
The NIP, along with several sector-specific programmes, has helped maintain the construction momentum, ensuring steady progress. However, outcomes have varied. While headline numbers reflect significant expansion, ground-level execution has been somewhat uneven.
Around 85 per cent of NIP’s vast funds are funnelled into just four critical sectors – transport, energy, real estate and water management. Delve deeper, and the pipeline reveals six specific sub-sectors absorbing the lion’s share – roughly 60 per cent – of all NIP investments. These are roads, railways, metro systems, renewable and non-renewable energy, and transmission lines. This concentration is evident geographically, too. While real estate projects are more evenly spread across states, most major infrastructure sector funding goes to certain states. In fact, a significant 70 per cent of NIP investments are channelled into only 17 states, including Maharashtra, Uttar Pradesh, Andhra Pradesh and Tamil Nadu.
Despite plans for private sector capital expenditure to comprise around 22 per cent of the pipeline, so far, participation remains strikingly low, barely scratching 1 per cent. This hesitation stems from delays in legal proceedings and uncertainties surrounding project risks and returns. As a result, government agencies continue to shoulder most of the burden, executing nearly 99 per cent of all NIP projects. Even public-private partnerships, hailed as a path to shared responsibility, make up a marginal slice of the NIP pipeline, hovering at around 11 per cent.
Parting thoughts
Ultimately, India’s ambition of sustaining its high growth depends on one key pillar: infrastructure. Looking ahead, the government is expected to continue to play a pivotal role in initiating spending and demonstrating effective project execution. However, for India to continue down the path of building quality infrastructure, a higher level of resource mobilisation from new sources will be crucial. Pooled funds for city-level projects, municipal finance bodies and asset recycling models can open new doors. Other options include tax increment financing, land sales and development rights. Corporate bonds from engineering, procurement and construction companies can bring in large sums for big-ticket projects. Green bonds can support climate-friendly efforts, while financing for construction equipment can be made easier through channel sales models.
The NIP has been a good start, but to unlock its full benefits, the next steps must include boosting local manufacturing and improving existing assets. Better roads, power supply, transport and water systems will make Indian businesses more competitive globally. At the same time, since infrastructure work requires a large workforce, it can create jobs and increase income levels, leading to more demand in the economy. Together, these steps can help set off a strong and lasting cycle of investment, growth and job creation.
Even as the NIP nears the end of its formal timeline, the overall pro-growth stance of the government has set a positive context for the upcoming years. This momentum has laid the groundwork for realising the long-term vision of “Viksit Bharat” by 2047. What remains clear is that support from the private sector and state governments is now more important than ever to make real progress on these ambitious plans.
With the direction for development now set, the next wave of asset creation must be anchored in deeper reforms, wider participation and sharper execution.
Harman Mangat
