India Plans $1.5 Trillion Infrastructure Spending to Spur Growth
(Bloomberg) -- India outlined the contours of a $1.5 trillion plan to build infrastructure over the next five years to shore up economic growth.
The program will include existing projects in the energy, road and railway sectors in the pipeline, Finance Minister Nirmala Sitharaman told reporters Tuesday. Private companies will account for 22%-25% of the investments, with the federal government and states contributing the rest, she said.
The push to increase spending on infrastructure was unveiled by Prime Minister Narendra Modi in August and a panel was subsequently formed to identify the projects. Building new roads, rail links and other social and economic infrastructure is key for attracting investments and making India a $5 trillion economy.
Several governments have tried to implement public-private partnerships for infrastructure in India, but have fallen short. The proposal by the Modi administration exceeds what has been spent over the past decade -- between 2008-17, India invested about $1.1 trillion on infrastructure, official data show.
Gross domestic product expansion in Asia’s third-largest economy slowed to a more than six-year low of 4.5% in the quarter ended September, prompting the Reserve Bank of India to lower its full-year growth forecast to 5%.
The panel identified 2.5 trillion rupees of ports and airport projects, 3.2 trillion rupees of digital infrastructure projects. Besides, total 16 trillion rupees of irrigation, rural, farm and food processing projects have been identified. Details of the full pipeline of investments wasn’t provided.
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