IN THE AFTERMATH of the outbreak of the COVID-19 pandemic and the resultant lockdowns, the Indian government stepped up capital expenditure, especially on infrastructure. This was not just prompted by the immediate need to shore up the domestic economy, cushioning it against the inevitable crash in economic activity, but the government also spotted an opportunity to address gaps in the country's infrastructure.
This increase in government spending is apparent in the gross domestic product (GDP) data for the second quarter of FY24 (Q2FY24). Growth in the bellwether of investments, gross fixed capital formation (GFCF), was at a five-quarter high of 11% year-on-year. Meanwhile, government spending rose by a 10-quarter high of 12.4%, thanks to the focus on capital expenditure. Besides, the investment rate, measured as the nominal GFCF-to-GDP, rose to 30% in Q2 from 29.1% a year ago.
The central government is estimated to spend about ₹ 23.3 lakh crore as capital expenditure between FY22 and FY24, including the outlay of ₹ 10 lakh crore this fiscal. Thanks to this increase in outlay, India rose by six places to rank 38 out of 139 countries in the seventh edition of the World Bank’s Logistics Performance Index 2023. The index takes into account factors like physical infrastructure, customs clearance, tracking, and timeliness. The government aims to move to rank 25 by 2030.
As India aims to become a $5-trillion economy in the next few years and a $30-trillion economy by 2047, such spending on infrastructure will play a key role. What’s more, with countries looking at a China+1 diversification strategy, it becomes even more imperative for India to expand and modernise its physical infrastructure over the next few years to become a viable alternative to foreign investors.
Esta historia es de la edición February 18, 2024 de Business Today India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 8500 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición February 18, 2024 de Business Today India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 8500 revistas y periódicos.
Ya eres suscriptor? Conectar
A Man of Multitudes
IN A NEW BOOK, CAPTAINS OF INDIA INC. AND OTHERS PAY TRIBUTE TO RAHUL BAJAJ, THE TITAN OF INDIAN INDUSTRY
HOUSE OF THE RISING SUN
WITH THE GOVERNMENT OFFERING SUBSIDIES UNDER THE PM SURYA GHAR MUFT BIJLI YOJANA, MANY HOUSEHOLDS HAVE TAKEN A SHINE TO SOLAR ROOFTOP PANELS. BUT HOW MUCH DO THEY COST?
FROM GREY TO GREEN
WITH THE CLIMATE CRISIS BECOMING MORE ACUTE, GREEN HYDROGEN COULD BE AN IMPORTANT SOLUTION
ECO CHAMBER
DATA CENTRES ARE A VERY VITAL PART OF THE DIGITAL TRANSFORMATION THAT IS UNDERWAY, BUT THERE'S A PROBLEM: THEY CONSUME TOO MUCH ENERGY. AS DEMAND FOR SUCH CENTRES INCREASES IN INDIA, IT HAS NO OPTION BUT TO EMBRACE GREEN SOLUTIONS
THE GREEN BARRIER
THE EU'S CARBON BORDER ADJUSTMENT MECHANISM COULD MAKE INDIAN EXPORTS UNCOMPETITIVE, UNLESS EFFORTS TO REDUCE CARBON EMISSIONS ARE ACCELERATED
HUMANISING SUSTAINABILITY
THERE IS A NEED TO MOVE BEYOND INDIVIDUAL WELL-BEING AND FOSTER A SENSE OF INTERCONNECTEDNESS AND SOLIDARITY
DE-RISKING THE BOOKS
INDIAN BANKS ARE BEGINNING TO TAKE BABY STEPS TOWARDS ADDRESSING CLIMATE-RELATED FINANCIAL RISKS IN THEIR BOOKS. BUT THEY MUST PUT THEIR FOOT ON THE PEDAL AND ENHANCE PREPAREDNESS
PAYING FOR CHANGE
WITH EXTREME WEATHER INCREASINGLY PUTTING THE COUNTRY AND ITS ECONOMY AT RISK, INDIA SHOULD EXPLORE CLIMATE FINANCE PATHWAYS TO FUND ITS NET-ZERO JOURNEY TOWARDS A GREENER FUTURE
BEYOND THE BLIP
ESG HAS BEEN UNDER SCRUTINY GLOBALLY AMID ALLEGATIONS OF GREENWASHING AND RECORD REDEMPTIONS FROM ESG FUNDS. BUT THAT MAY JUST BE ONE SIDE OF THE STORY, SINCE SUSTAINABLE PRACTICES HAVE BECOME CORE COMPONENTS OF COMPANIES' STRATEGIES
PROFITING FROM ESG
INITIALLY DRIVEN BY REGULATORY COMPLIANCE REQUIREMENTS, BUSINESSES ARE INCREASINGLY VIEWING ESG AS A TOOL TO ENHANCE PROFITABILITY. BUT THERE IS STILL A LONG WAY TO GO