But infrastructural investment is still way behind target in sectors, apart from oil. The Asian Development Bank, in a report last October, identified a funding gap of more than US$100 bn. and the IMF attributes India's current slowdown in large part to infrastructure delays. The Indian Government in the past has acknowledged that poor infrastructure shaves between 1-2% of GDP. A cabinet task force set up by Prime Minister Manmohan Singh recently fast-tracked approvals for projects worth 5% of GDP. But severe bottlenecks will limit the scope for his successor to achieve a turnaround. US$52 bn. is at least now starting to move forward, out of the US$80 bn. cleared last year This should lift demand for raw materials such as steel and cement. But the customary pre-election release of infrastructural funding has come too late to revive the economy before the general election.
Here is the India Report.
India’s election begins next month and it should be unusually transformative in a very positive sense.
International investors have been buying in anticipation of Narendra Modi’s BJP victory. The bigger the majority, the more likely we are to see further stock market gains once the final result is confirmed in May.Back to top