Infrastructure is crucial for both India’s growth and its economy. The Government gave major a push to the sector by increasing the public capital investment by 35.4% from Rs. 5.54 lac crores to Rs. 7.5 lac crores and is planning to focus on expanding the existing network of national highways by 25000-kilometres and also on the development of multimodal logistic parks, cargo terminals and ropeway projects. This will not only give a push to Indian infrastructure but will also yield enormous benefits to the logistics sector and further help India to recover from the pandemic. Furthermore, the Government welcomes private sector participation in India’s infrastructural development as it intends to execute all its projects through Public-Private-Partnership(PPP). The continued focus of the Budget on Indian Infrastructure will help in boosting the growth rate of the Indian Economy and will help it reach its goal of becoming a 5-trillion dollar economy.
Road, power, Industrial corridors, smart cities, airports, urban infrastructure developments, water supply projects are likely to be key areas. Having said that, there are many challenges facing the sectors. There is a significant shortfall in planned projects, announced projects do not start on time, there are delays in implementation and execution, getting land and environment clearances are difficult. Time and cost overruns are often seen. Since banks have burnt fingers in the past, they are wary of investing and very cautious about lending. However, the Indian Infra sector has resumed drawing huge investment now as the potential is enormous. Policy support in the form of 100% FDI under automatic route across various sectors making the sector investment-friendly. Foreign investments are coming as global liquidity is abundant and interest rates are close to zero.
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