Budget should reemphasise infrastructure, push private participation

Revive PPPs, enable group taxation for infra SPVs, fund high-speed rail separately, and prioritise urban projects to reignite growth, argues infra expert

Infrastructure spending must, once again, be viewed as the turbocharger for economic growth because of its high multiplier effect. Every ₹1 invested in infrastructure is believed to generate ₹3 of economic output. This alone underscores why public capital expenditure in infrastructure remains crucial. Thus, the relative “de-emphasis” of infra outlays growth in the last Budget should be reversed. This is crucial also in the current environment where private investors in greenfield infrastructure are still hesitant.

 

The macroeconomic framework for determining infrastructure outlays is well-established. The underlying assumption is that gross capital formation in infrastructure (GCFI)