Indian infrastructure - at a faster pace to meet the economy’s growing needs

Bharatbook added a new report on "Indian Infrastructure Report" which gives the investment opportunities, status and outlook of Indian Infrastructure Market.

Online PR News – 09-September-2010 – – Indian Infrastructure Report

The robust growth trajectory of the Indian economy over the past few years has pushed India into greater prominence on the global front. Following a series of reforms starting in the early 1990s, Indian GDP growth has accelerated significantly over the last decade. The domestic GDP, which averaged 8.5 per cent during 2004-05 to 2007-08, reached an unprecedented high of over 9 per cent in the fiscal year ending March 2008 consequently making India, one of the fastest growing economies in the world. ( )

In the corresponding period, policy makers have also tried to balance the need to increase investments especially in areas such as urban infrastructure, irrigation, healthcare and education, with the need to control fiscal deficit. Thus, despite a well-intended reform process, the pace of infrastructure development has been unsatisfactory until now.

Typically for a developing country, economic progress has to be preceded and also accompanied by higher spend on infrastructure. The relationship between infrastructure and economic growth is still debated extensively. As an economy matures, it enters into the infrastructure maintenance mode, but in the early stages of economic development (where India currently is), infrastructure has to be expanded at a faster pace to meet the economy’s growing needs.

Thus, like many other developing nations, India has also been in the investment mode for a considerable length of time. It has estimated the capital spend to GDP ratio for 9 identified sectors, which has shown a near doubling from 6 per cent recorded in 2004-05 to 11.6 per cent in 2008-09. Given the growth in the infrastructure spend one would have expected the shortfall in infrastructure demand-supply to have narrowed, however an even higher growth in the economy has resulted in the opposite. In fact infrastructure impediments continue to plague most sectors such as airports, ports, power, roads, telecom, railways, irrigation, etc.

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