Need to invest Rs235 trillion in infrastructure sector over the next decade

, Ta. November 27, 2019, Wednesday

The country's infrastructure will need an investment of Rs 235 trillion over the next decade. Andhra, Telangana and Haryana are leading advocates in road sector projects with 50% of total investment expected in the next ten years, according to a report by Crisil Infrastructure Advisory (CIA).

These states are expected to take the lead since the base is low. This amount is double compared to the BJP's election manifesto, which will invest Rs 100 trillion in infrastructure over the next five years.

Rajasthan and Uttar Pradesh were the high-spending states in recent years but they are currently experiencing financing due to rising debt.

The next decade requires infrastructure spreading of Rs 235 trillion across the country. And to achieve this, India's infra cost should be above 6% of GDP and the annual growth rate needs to be 7.50% on average.

Unless states contribute 50% of infra investment, India's start-up momentum may be hindered. In recent years, when private investment has fallen and states continue to spend public spending, looking at fiscal constraints on central spending.

In such a case, if the states want to maintain the level of capital expenditure, then fiscal well-being will have to be strengthened and institutional capacity will be created.