India with Higher Capital Investment, Ready to Stimulate Infrastructure Development and Economic Growth

India is on the quest of becoming the world’s 3rd largest economy by the end of this decade. It thus demands thriving investment in capital expenditure (Capex). The huge possibilities of consumption, demand, and growth the public as well as private capital investment are accelerating the growth of India’s infrastructure development across the sector of the economy.

India’s investment landscape is primarily governed by public capex followed by private investments and FDI flow. The continuously rising public investment in the capex has promised new opportunities for infrastructure development and economic growth.

The Union Budget 2023-24 has continued the trend of the last three years and proposed a sharp increase in the budgetary allocation in capital investment to achieve multiple benefits like economic growth, job creation, etc. This will in turn attract private investment in various sectors that will support India’s unprecedented growth in changing global headwinds.

The effective capital investment in the FY 2023-24 is proposed to be 4.5% of the GDP which will incentivize the Indian states to take necessary policy actions to support India’s effort to continue as the fastest-growing economy of the world. As the capex has a multiplier impact on economic growth and development, the Government of India is providing special assistance to states in the form of an interest-free loan for up to 50 years of tenure

The recent approval of Rs 56,415 crore by the Ministry of Finance, to 16 Indian states as capital investment is going to provide momentum to various sector-specific projects. These projects in turn add to the infrastructure development and bring new opportunities of livelihood for Indin youth as well as skilled manpower.  

Due to various reasons such as high inflation, lower demand, etc private investment in the capex always takes a back seat. But the continuous push by the government with supporting policy framework function as a catalyst in attracting private investors to invest in the diverse sector of the economy like education, health, irrigation, roads, etc.  This all has a direct impact on the daily life of the Indian population and thus adds up to the shining growth story of the country.