Capacity shortage in building block industries to create growth opportunities: KV Kamath

A new World Bank report estimates that India will need to invest $840 billion over the next 15 years—or an average of $55 billion per annum—into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population.

The report, titled “Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action” underlines the urgent need to leverage more private and commercial investments to meet emerging financial gaps.

Under Budget 2023-24, capital investment outlay for infrastructure is being increased by 33 percent to Rs.10 lakh crore (US$ 122 billion), which would be 3.3 percent of GDP and almost three times the outlay in 2019-20.

Under the National Infrastructure Pipeline (NIP), projects worth Rs. 108 trillion (US$ 1.3 trillion) are currently at different stages of implementation

“In the infrastructure side, a 25 year horizon is a given. In other areas, it is going to be periodic growth, in the sense that you will build capacity, you will then probably have 20 percent extra capacity, you will absorb it over the next three years, then you will start building again. So you will see that periodic growth, but in infrastructure is going to be one continuous outlay,” Kamath added.

Highlighting the significance of the digital economy, Kamath emphasised that it has the potential to contribute an additional 25 percent to India's current growth rate of 6.5 percent.

Kamath also made an intriguing observation about the West's economic landscape, stating that while they taught the world economics, they themselves have become the "Wild West."