As India looks to boost economic activity, it will invest around $3.9 trillion to build the required infrastructure by 2040, according to the latest Economic Survey tabled in the Parliament on Monday by Finance Minister Arun Jaitley.
According to the survey, India would need a total investment of $4.5 trillion in infrastructure by 2040. Out of this, the country will manage to invest as much as $3.9 trillion and face a shortfall of $526 billion.
“Around US$4.5 trillion worth of investments is required by India till 2040 to develop infrastructure to improve economic growth and community well-being. The current trend shows India can meet around US$3.9 trillion infrastructure investment out of US$4.5 trillion,” the Survey said.
The tree issues that will lead to the shortfall, as cited in the survey, include the collapse of public-private partnerships, stressed balance sheets of private companies and problems with land and forest clearances.
The country is currently working on 1,263 infrastructure projects across sectors such as power, road, railways, shipping and telecom.
The two major projects - Bharatmala and Sagarmala - would need Rs10 trillion and Rs8 trillion of investments until 2035 respectively.
Improving India’s logistical infrastructure is important as it affects the competitiveness of Indian businesses with players around the world, the report noted.
“Improving logistics sector has huge implication on exports and it is estimated that a 10% decrease in indirect logistics cost can increase 5-8% of exports. With the implementation of goods and services tax (GST), the Indian logistics market is expected to reach about US$ 215 billion in 2020, growing at a CAGR (compound annual growth rate) of 10.5%,” the Survey said.
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