There are different approaches.Shamlee wrote:A question was raised by my brother. With the economy of India in doldrums due to stupid schemes like NREGA, Food Security Bill, free gas cylinders etc. how will Modi's govt. come up with the necessary finances to start new infrastructure projects? Any answers from BRFites?
MMS says $1T investments are needed over next 10 years. This works out to be $100B/Yr
During the same time, India will have an average of $5-600B national savings (25-30% of GDP)
1. Making the already existing infra bonds more attractive by making some other avenues expensive.
2. Integrating NREGA, FSB, Gas-cylinders etc funds into Infra development projects. For example, instead of digging holes in ground or giving free food or Gas which is estimated to be about $40-50B per year; the same amount can be used to train and employ these down-trodden groups. Based on rough calculations this $40-50B funds can help create 4-5 million permanent jobs every year. So over 5 years, the govt will be creating 20-25million permanent jobs, thus permanently uplifting 100 million (8-9% of total population) Indians.
BTW, the problem is not access to capital as many people think. The real issue is this...
One of the Budget proposals to spur infrastructure investments — issuing tax-free bonds of Rs 50,000 crore — may prove a nonstarter because most institutions that can raise funds through this route have yet to spend cash raised through earlier bond sales. With infrastructure projects across sectors failing to take off in 2012-13 due to various delays, institutions such as National Highways Authority of India (NHAI) and India Infrastructure Finance ..
Read more at:
http://economictimes.indiatimes.com/art ... aign=cppst