The total capital outlay for roads and renewables in 2023-24 and 2024-25 is likely to jump by 35 per cent to Rs 13 lakh crore compared to that in the last two fiscal years, according to a report.
Conducive policies, rising investor interest and strong execution speed are expected to drive the capital outlay in the sectors, the report by Crisil Ratings said on Tuesday.
The pace of road construction and capacity addition in renewables is seen growing by 25 per cent and 33 per cent, respectively, in the current and next fiscal, and the capex growth is expected to sustain over the medium term, the report said.
Crisil Ratings Managing Director Gurpreet Chhatwal said the pace of execution of renewable energy projects is set to increase 33 per cent to 20 GW per annum over the current and next fiscal as compared to 15 GW per annum in the past two fiscal years, supported by a healthy executable pipeline of 50 GW of projects as of March 2023.
Similarly, road construction is set to improve 25 per cent to 12,500-13,000 km annually over the current and next fiscal, driven by healthy awarding of projects and step-up in execution, it said.
Chhatwal said the levels at which companies are bidding for projects is a key monitorable going forward. The agency's Senior Director Manish Gupta said while the last two years have seen aggressive bidding, there are no challenges on the implementation side.
Gupta said investor interest has been encouraging, with Rs 75,000-80,000 crore raised through equity and asset monetisation in the past two fiscals in both these sectors.