Renewable energy, roads and real estate sectors will grow by 38%. and will reach Rs 15 lakh crore in 2 years

New Delhi, June 18 (IANS): With supportive policy interventions, investment in India’s key infrastructure sectors – renewable energy and roads – and real estate is likely to increase by 38 per cent in fiscal 2025 and 2026 compared to the previous two fiscals, to Rs 15 lakh crore, a report showed in Tuesday.

According to CRISIL Ratings, this growth will be driven by India’s need to create sustainable infrastructure by adding more green energy to its energy mix, improving physical connectivity through a denser road network, as well as growing demand for residential and commercial real estate.

In the case of renewable energy sources, the key growth factor is the demand for a sustainable energy transformation.

The government’s goal is to increase the number of auctions, which has created a solid bidding base, the report mentioned.

“Demand fundamentals in these three sectors remain strong, with regular policy interventions increasing investor interest. This has also supported healthy credit risk profiles of private entities and strengthened their execution and financing capabilities,” said Krishnan Sitaraman, Senior Director and Head of Ratings, CRISIL Ratings.

In India, 35 GW of capacity was auctioned in FY2024, the highest ever auction in a single financial year, resulting in a production capacity of 75 GW.

According to the report, this will primarily drive the deployment of 50 GW of generating capacity over the next two budgets.

When it comes to the road sector, the need for better physical connectivity, which helps in increasing economic productivity, has led to judicious rewards in the last few budgets, barring the last one.

“Higher order books for road developers, at 2.5 times revenues, will support an 11 percent increase in highway construction, which is projected at 12,500 km per year in the next two financial years,” the report noted.

On the real estate front, net leasing demand for commercial office space will see an 8-10% increase in demand this year and next. “A total of Rs 2 lakh crore of equity capital has been deployed in these sectors in the last two fiscal years, driven by strong investor participation,” said Manish Gupta, senior director and deputy director, ratings.