The International Monetary Fund (IMF) recently attributed India's robust economic growth to strong public investments supported by a resilient domestic demand.
Pacific Krishna Srinivasan, Director of the Asia and Department, International Monetary Fund said in a blog post: "...India, where public investment remains an important driver, making it the world's fastest-growing major economy." But there are layers to this.
The government capital expenditure (capex), both of the Centre and states, steadily rose in recent years, aggregating more than Rs 10 trillion since 2021-22 (FY22). It is projected to rise to ₹19.07 trillion (revised estimates of the Centre and budget estimates of the states) during FY24, 34 per cent higher than the previous year. This comprised 6.5 per cent of the country's gross domestic product (GDP) during FY24 against 5.3 per cent in the previous year and 5.6 per cent in FY22.
Govt capex drives growth Most of this capex push, particularly the Centre's, has gone to infrastructure, mainly to railways, and roads and highways.
The two accounted for more than 45 per cent of the Centre's capex since FY21 and more than 40 per cent since FY20, when the economy started slowing down with lockdowns being announced at the fag end of the year.
Madan Sabnavis, Chief Economist at Bank of Baroda, says governments have a role to play in infrastructure, where the private sector normally plays a secondary role. "Our government has been focussing on roads and railways for this reason," he says.
Ranen Banerjee, Partner at PwC India, believes the economic growth is being pump primed by government expenditure, which is needed. The government can afford it, given the high tax buoyancy. The government capex is skewed towards roads and railways because these are two sectors that are able to absorb the allocations, he says.
Diese Geschichte stammt aus der May 13, 2024-Ausgabe von Business Standard.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der May 13, 2024-Ausgabe von Business Standard.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
Brokerages bullish on ITC's long-term growth
Despite a subdued performance in the March quarter (Q4FY24), brokerages remain optimistic about the long-term growth prospects of ITC.
InterGlobe Aviation hit an air pocket in Q4
The civil aviation market has become more or less a duopoly with leader Indigo InterGlobe Aviation-reporting strong Ebitda growth of 45 per cent yearon-year (Y-o-Y) to ₹3,980 crore in the January-March quarter (Q4) of FY24, with PAT rising more than two times to 1,890 crore.
Vishares jump 7.5% on UBS upgrade
A'likely' relief on the government dues front for Vodafone Idea (VIL) and expectations of telecom tariff hikes could drive the share prices up by 70-80 per cent, global broking firm UBS said in a report.
Come June 24, Adani Ports to replace Wipro in Sensex
Nifty ends flat after Adani Ports and Special Economic Zone (SEZ) hitting 23,000 mark will replace Wipro in the benchmark 30-share Sensex, index tracker Asia Index said in a notification on Friday.
GQG, Qatar Investment and IHC make hefty gains on Adani bets
The resurgence in Adani group stocks over the past year has resulted in substantial gains for their investors, including US-based GQG Partners, the Qatar Investment Authority, and Abu Dhabi's International Holding Company.
Size matters when it comes to MF voting patterns
Asset managers are speaking up more than before
Chennai on front foot ahead of IPL final
Hotel, flight bookings have increased by 15%
A naturalist's discovery of India
This exploration of India's wild heritage by author, academic and naturalist Stephen Alter is not a journey through the country's few remaining wild areas.
INDIAN SPICES IN GLOBAL PICKLE
There are many regulators in the sector, but none regulates the entire supply chain from farm to market. Is the matter falling between stools?
Global minimum tax deal on multinationals may fail
US, India, China have reservations over the terms of the deal: Italy economy minister