Indian plans to spend $121 billion on infrastructure

Financial services company Novama Wealth of India reported that the government’s plans to spend 10 trillion rupees ($ 121 billion) on infrastructure projects focused on expanding manufacturing in rail, energy and defence, among others.

Analysts Subadeep Mitra and Vijay Basin of Novama Wealth said in a note that “while the best for private sector capital expenditures is yet to come, public sector capital expenditures have already shown a rise, compared with the last few quarters.”

According to Bloomberg news agency, the Novama memo expects to ignore orders from industrial companies in the second half of fiscal year 2024 due to geopolitical risks and fears of the U.S. recession and the upcoming general election.

India’s gross domestic product (GDP) grew 7.2 per cent in fiscal year 2022-2023, driven by the performance of the services and consumption sectors which it places in the ranks of the world’s fastest-growing economies.

India is the world’s fifth largest economy and has finally overtaken China to become the world’s most populous nation. The country’s economy managed to register strong growth of 9.1 per cent in fiscal year 2021-2022, but like other countries, the economy has been hit by unfavourable global conditions, including tightening global finances, war in Ukraine and geopolitical tensions.

India imports more than 80 per cent of its crude oil, which has seen strong rises due to the Ukrainian crisis, and India’s economy grew 6.1 per cent in the fourth fiscal quarter, from January to March, compared to the same period last year, according to the Office for National Statistics.