Development Watch – Week #1 June ’24
Development News
India’s peak power demand at 250 GW
On May 30th, India has witnessed a historic milestone. The country’s power demand surged to a record-breaking 250 Giga Watts. This has been driven by a combination of weather-related loads and escalating power consumption in both industrial and residential sectors, as announced by Power Ministry on Thursday. The non-solar hours (night time) demand also soared to 234 GW on May 29th. Last year the peak demand in May was 221 GW due to fewer days of heatwave conditions. This shows a significant increase in energy requirements. Thermal generation achieved a peak of 176 GW during non-solar hours. A key contributor for the generation was implementation of Section 11 of the Electricity Act. This has facilitated the maximization of generation from imported coal based plants and gas based plants.
Focus on Capex and Infrastructure for next phase of growth
According to research by CLSA India, GDP forecasts for India have been raised from 7% to 6.5% for FY-2025. GVA forecasts have also been raised at 6.3%. There are mainly 3 headwinds that the economy has been facing, including high US-rates, problem of a global slowdown, and thirdly El Nino. The El Nino situation may turn into La Nina, leading to a kharif crop by the end of 2024. The Fed in the US may cut rates in November and RBI can start cutting rates in October. The government will strive to build global manufacturing hubs in 8 or 10 areas. There will be emphasis on capex and infrastructure from government side.
Strengthening India’s robust Infrastructure
Infrastructure development in India’s economic growth, sustainable development and global leadership aspirations. This necessitates strategic investments, initiatives and partnerships to unlock its full potential on the world stage. India needs to customize its infrastructure development to suit its distinct requirements and obstacles, while also gleaning valuable insights and best practices from global experiences to better tackle these challenges. According to a recent CRISIL report, India is projected to allocate nearly Rs. 143 lakh crore towards infrastructure development over 7 fiscal years until 2030. Approximately Rs. 36 lakh crores of the total amount will be earmarked for green investments.
India’s retail expansion led by urbanization and consumption growth
The top 7 Indian cities of Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Pune, Kolkata and Chennai will add over 45 million sq ft of retail real estate through 88 new developments. This anticipated growth will outstrip the retail space supply from the past decade (2014-2023), which totaled around 38 million sq ft. This is as per data from JLL India. The dynamic evolution of India’s retail sector is driven by increasing urbanization, rising consumer demand, and a robust economy. The completion of organized retail spaces is expected to surge significantly over next 5 years. The current retail stock of ~89 million sq ft is projected to grow 50% to 135 million sq ft by end of 2028.
Airline profits and passenger traffic to hit record highs at 2024
Airlines in India are expecting to fly nearly 5 billion passengers in 2024. The record beating the pre-covid pandemic high, as per the international trade industry association IATA. The International Air Transport Association also said it expected the world’s airlines to post $30 billion in net earnings this year. This is up from its previous estimate of $25.7 billions.
Ports cargo traffic at 72 million tonnes in May 2024
Cargo traffic across 12 major ports in India increased by 3.75% YoY in May 2024 to 72.04 million tonnes from 69.43 MT handled in May 2023. The 12 major ports are Deendayal (Kandla), Mumbai, Mormugao, New Mangalore, Cochin, Ennore (Kamarajar), Tuticorin, Vishakhapatnam, Paradip, Kolkata and Jawaharlal Nehru Port. Vishakhapatnam Port registered maximum cargo growth in cargo handling at 22% during the reporting month followed by Chennai Port with 9.10%. This is according to data released by Indian Ports Association.
Delhi-Mumbai Expressway route, toll, distance and time
The Delhi-Mumbai Expressway connects India’s two megacities. It is a testaments to India’s rapid infrastructural growth. The foundation stone for the project was laid by Highways Minister Nitin Gadkari in March 2019. It is also part of the Golden Quadrilateral and another 59km stretch from DND Flyway near Maharani Bagh to the expressway will open by end of 2024. This will allow commuters to bypass the congested Mathura Road and avoid traffic, once the road opens. The Delhi-Mumbai Expressway runs through Dausa, Kota, Ratlam, Vadodara and Surat to link Jawaharlal Nehru Port in Maharashtra with the Sohna elevated corridor in Delhi. The total route is more than 1,350 km in length, with Gujarat having 426 km, followed by 373 km in Rajasthan. It will reduce travel time between Delhi-Mumbai to 12 hours from 24 hours. Toll starts from Rs. 95 for light vehicles.
Local Feedback
LocalFeedback.org aims to track and document actionable parameters that help improve urban and rural infrastructure. The founder, Susmita, has juggled diverse roles in real estate, project budgeting, valuation and execution on construction sites. Having traveled to more than 20 countries, she has worked across 4 regions in India. Her areas of interest include sustainable buildings, electric mobility and urban development. She visited top-ranking cities on livability indices and has presented published papers at international conferences.