Snapshot of infrastructure development projects

Smartcities and Make in india and Infra. development -
housing for all capital goods policy DFCs and Metros

Source: Industry Publications, CRISIL Research

 
 

Various government initiatives, such as Make in India, Smart Cities Mission, dedicated freight corridors, metro
rail projects and railway track electrification, are expected to boost infrastructural development in the country,
albeit in the medium to long term.

T&D network augmentation to support demand growth

With the government’s focus on alleviating congestion, transmission capacities are expected to witness robust
growth. About 330-350 giga volt ampere (GVA) transformation capacity (above 220 kV level) is expected to be
added between fiscals 2021 and fiscal 2025 to reach cumulative transformation capacity of 1,300-1,350 GVA by
fiscal 2025.

In particular, CRISIL Research expect robust growth in high voltage (HV) lines of 400 kV and 765 kV, due to its
importance in inter-state transmission lines.

Ultra-high capacity green energy corridors with expected investments worth Rs 430 billion

Thus, higher investments are expected in the transmission segment over the next five years (fiscal 2021-2025) in
the range of Rs 3-4.0 trillion compared with Rs 3.0-3.2 trillion invested over the past five years. This would result
in the widening of the transmission network, higher grid availability and improved power supply to all regions.
Thus, the expected improvement in T&D infrastructure, coupled with agricultural feeder separation and extensive
rural electrification under the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) will drive power demand
upwards over the next five years (fiscal 2021-2025).

Per-capita consumption to rise due to improved access to electricity

Electricity consumption per person rose from 1,010 kWh in fiscal 2015 to 1,181 kWh in fiscal 2019, largely due
to strengthening of the T&D network along with large capacity additions over the period. However, per-capita
consumption dipped to 1,148 kWh in fiscal 2020, as power demand growth slowed down, registering a CAGR of
2.6% for the past five years. T&D network expansion reduced the deficit levels as well as added the hitherto
unconnected areas to the electricity grid, providing electricity to more households and commercial and industrial
establishments. India’s per-capita electricity consumption is expected to grow at a relatively lower CAGR of 2-
2.5% between fiscals 2021 and 2025, primarily due to the decline in power demand in fiscal 2021. Per-capita
consumption is expected to gradually improve in the long term, as power demand picks up, due to the improvement
in access to electricity in terms of quality and reliability because of intensive rural electrification and reduction in
cost of power supply, resulting in realisation of latent demand from the residential segment. Consequently,
CRISIL Research expects per-capita electricity consumption to reach 1,270-1,320 kWh by fiscal 2025.

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