Since COVID-19, the government has used public infrastructure spending to boost economic recovery, creating demand for materials and jobs, and attracting private investment.
Budget 2024-25: ₹11.11 lakh crore allocated for capital expenditure (capex), aiming for 3.4% of GDP, with plans for continued fiscal support.
Challenges: Capex targets may not be met due to spending curbs in the first quarter.
Data shows reduced private investment, with a drop in investment plans in Q1 and no significant recovery in Q3.
Corporate risk-taking is affected by weak results, global uncertainties, rising costs, and low demand in urban markets.
For sustained growth, private investment is essential, as public capex alone has limits due to fiscal constraints.
Despite incentives, the industry remains cautious, with unviable projects and uncertain demand deterring investment.
To boost investment, the government needs to prioritize reforms, improve consumption, and create favorable conditions for growth.
COMMENTS