Deloitte’s survey reveals India’s infrastructure sector requires more private participation, simpler rules, and better project preparation. 38% cite lack of private funds as a major challenge, while 42% point to complex regulations as a barrier.
Key Challenges and Recommendations
The report said India’s challenge is not limited to raising capital but also involves making projects more attractive to investors and ensuring they are ready for execution.
About 42 per cent of Indian respondents identified complex policies, regulations and approval processes as barriers to project delivery, while 38 per cent cited budget constraints as a key impediment.
The report called for better project preparation, clearer revenue models and financing structures that distribute risks among stakeholders best placed to manage them.
Shifting Financing Models
The survey also pointed to a shift in infrastructure financing, with Indian respondents expecting greater use of diversified funding models. About 71 per cent expect growth in vendor and supplier financing, while 62 per cent foresee higher funding from multilateral and development banks. Another 58 per cent expect increased participation from sovereign wealth funds and pension funds.
Deloitte said India’s Hybrid Annuity Model (HAM) is an example of how government support and risk-sharing can improve the bankability of infrastructure projects and attract private investment. Under HAM, the government funds 40 per cent of construction costs, while risks are shared between public and private stakeholders, creating more investable opportunities.
The Role of Technology
Technology is also expected to play a major role in the future of infrastructure. About 71 per cent of Indian respondents said the public sector needs to modernise infrastructure and adopt digital engineering technologies, compared with 36 per cent across the Asia Pacific region.
Further, 91 per cent of Indian respondents expect technologies such as generative artificial intelligence (AI), digital twins and predictive analytics to have a significant impact on infrastructure and transportation operations.
NSN Murty, Government & Public Services Consulting Leader, Deloitte South Asia, said technology is becoming an important link across infrastructure systems. “Indian leaders are moving beyond viewing AI as a standalone technology and are beginning to see it as an operating layer for infrastructure planning, financing, delivery and operations,” Murty said.
He added that governments would need to combine AI, digital twins, cybersecurity and real-time analytics to improve project delivery, strengthen resilience and support better investment decisions. The survey showed that organisations are already preparing for this shift. About 79 per cent of Indian respondents said they are developing AI training and development programmes, while 62 per cent are preparing AI vision and implementation roadmaps. Another 54 per cent are taking steps to improve data quality for applications including predictive maintenance, security, energy forecasting and asset monitoring.
Future Investment Hotspots
The survey also highlighted key areas expected to attract higher infrastructure investment in India. About 93 per cent of respondents expect increased investment in cybersecurity, while 82 per cent see growth in freight rail and mass transit systems. Around 80 per cent expect higher investment in public Wi-Fi infrastructure, while 77 per cent anticipate expansion in alternative energy sources, including solar, wind and geothermal power. (ANI)
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