Development Watch – Week #1 Feb’25
Development News
Real estate to lead renewable energy revolution
The way we build our cities will define India’s future, as real estate is the backbone of economic growth, urban expansion, and evolving lifestyles. Over $1 trillion in private capital is flowing into sustainable real estate projects worldwide. Buildings account for 35% of India’s electricity use, and with urbanization accelerating, that figure will only grow. Solar power costs have fallen by 90% in the last decade, making it a realistic, cost-effective option for residential and commercial projects alike. Energy-efficient designs are proving their worth, with smart retrofits cutting electricity costs by up to 50% within just a few years. Developers who integrate solar energy, smart insulation, and water efficient infrastructure today will not only reduce their operating costs but also build projects that attract premium buyers and investors. Cement and steel alone contribute nearly 20% of global carbon emissions—yet new, low-carbon alternatives are emerging. Bamboo, recycled steel, and low-emission concrete are not just greener; they are cost-effective and increasingly available.
UDAN Scheme extended for 10 more years
The government announced the extension of the regional connectivity UDAN scheme beyond its original tenure of 10 years. A modified version of the “Ude Desh ka Aam Nagrik (UDAN)” scheme for connecting 120 destinations and 40 million additional fliers over the next decade is being launched. Under the scheme, 619 routes connecting 88 airports, including two water aerodromes and 13 heliports, have been operationalized so far benefitting 14 million passengers. Star Air, which started flights on more than 90% of the routes it won by bidding under the scheme, plans to expand its fleet to 14 aircraft by this year-end from nine currently. Multiple airports developed under the scheme such as Pakyong in Sikkim, Solapur and Sindhudurg in Maharashtra, and Kushinagar in Uttar Pradesh do not have any flights currently.
Support to Offshore wind projects in Budget 2025
The Indian government has made commendable strides in promoting renewable energy (RE), including setting an ambitious target to auction 37 GW of offshore wind capacity by 2030. Offshore wind, a stable and reliable RE source, provides for diversifying India’s energy mix. However, achieving this goal will require significant financial and policy support. The upcoming Union Budget 2025 is an opportunity for the government to allocate additional funding and address key challenges. In June 2024, the government announced its first-ever Viability Gap Funding (VGF) scheme for offshore wind; INR 6,850 crore to support the installation of 1 GW of offshore wind—500 MW each off the coasts of Gujarat and Tamil Nadu. However, an additional 9,000 crore would be required to bring costs at par with the round the clock (RTC) electricity benchmark price of INR 5.5 per kWh, compared to the current offshore wind cost of INR 10-15 per kWh.
Budget provisions for Rooftop Solar Scheme
The Indian government has boosted the budget for the Pradhan Mantri Surya Ghar Muft Bijli Yojana by 80% to ₹20,000 crore for FY26. The initiative aims to install rooftop solar systems in 10 million households by FY27, promoting solar energy adoption and enhancing energy security. The scheme was launched in February 2024 with an outlay of Rs. 75,021 Crores. The scheme offers a subsidy of up to 40% to households, making renewable energy more affordable and accessible.
Rs. 25,000 Crores Maritime Development Fund
A Maritime Development Fund with a corpus of Rs. 25,000 Crores will be set up for long-term financing for the maritime industry. By 2030, Maritime Development Fund (MDF) is aiming at generating up to Rs 1.5 lakh crore investment in the shipping sector. India is also looking to promote domestic shipbuilding to boost international trade. The Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages. Another innovative scheme announced in the Budget is the Shipbreaking Credit note. This scheme incentivizes Ship Scrapping by issuing a Credit Note of 40 per cent of the scrap value which can be reimbursed to buy new Made in India ships. Large ships above a specified size will be included in the infrastructure harmonized master list (HML). Shipbuilding clusters will be facilitated to increase the range, categories and capacity of ships. The Union Budget has also extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, aimed at providing direct financial subsidies to Indian shipyards.
AIMC technology for road & highway construction
Ministry of Road Transport and Highways will soon implement the automated and intelligent machine-aided construction (AIMC) technology to other national highway projects. Recently, NHAI is implementing a pilot project of AIMC on the Lucknow-Kanpur Expressway. Here automated and intelligent machines such as GPS aided motor grader, intelligent compactor and stringless paver have been used. Based on evaluation of the efficacy of AIMC demonstrated in this project, along with feedback from the project stakeholders and considering the international guidelines and specifications.
Swachh Bharat Mission changed Sanitation in India
Swachh Bharat Mission has made a fundamental transformation in India’s pursuit of universal sanitation access. The Economic Survey brought about in the Parliament showed India has made significant strides in water management and rural sanitation, community participation, technological interventions, and sustainable practices. The Swachh Bharat Mission-Grameen Phase II, operational from 2020-21 to 2024-25, transitioned villages from Open Defecation Free (ODF) to ODF Plus status. Bhu-Neer portal, launched last September, serves as a central hub for regulating groundwater resources. Meghalaya’s Mawrah Multipurpose Reservoir Project integrates rainwater conservation with groundwater recharge and environmental restoration. Chhattisgarh’s Jal Jagar campaign promotes community-driven rainwater harvesting and wastewater management across 370 gram panchayats, engaging more 1.4 lakh people, including 80,389 women.
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.