Inclusive Growth

Inclusive Infrastructure

Background: 

Due to a stable and democratic political landscape, favourable demographics, a large captive domestic market, and sustainable external debt, the country's economic growth prospects are still viable. The Indian economy, on the other hand, is not without its flaws. The Indian government has introduced laudable policy initiatives such as the Production Linked Incentive (PLI) Scheme, PM Gati Shakti National-Master Plan, and the Atmanirbhar Bharat Mission to transform the economy and boost its longterm potential. 

Build Infrastructure, Enable Growth

• Infrastructure will essentially pave the way for a $5 trillion economy and beyond. From physical infrastructure to social infrastructure to digital infrastructure involving telecommunications and broadband to transportation networks, infrastructure creation and upgrade must be comprehensive. 
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  All of these require significant investments, and given the recent lull in private investment, the funds will essentially have to come from the government. 
• The government unveiled the National Infrastructure Pipeline (NIP) in 2019, which set targets for infrastructure building across various sectors and regions over the next six years (until FY25) by the government in collaboration with the private sector.
•  The central and state governments are proposed to fund the majority of this investment (approximately 80%). However, due to the continued slowdown and resulting lower revenues, their ability to do so effectively and in a financially prudent manner remains a challenge.

Focus: Manufacturing and Exports 

• Along with infrastructure development, key policy reforms and measures aimed at boosting the manufacturing sector, such as the PLI scheme, are expected to boost economic output in the coming years. 
• The PLI scheme will not only change the manufacturing landscape, but will also make India more competitive in terms of global supply chain integration. 
• As a result, the country's exports, job creation, and aid demand could all benefit.
• The Gati Shakti programme, which promotes multimodal infrastructure connectivity, has the potential to boost local manufacturing and facilitate exports.
• The success of these programmes, however, is contingent on the creation of enabling infrastructure and structural reforms. 

Digital Drive 

• The digitization of the Indian economy is one of the major transitions accelerated by the pandemic. In the coming years, technology and digitization are expected to dominate the Indian economy's narrative.
• Despite the rapid and widespread adoption of digital technology over the last two years, there are still gaps and challenges in terms of accessibility and ability to use it. 
• Though the government has been working on programmes to close the gap, the most pressing need is for the country's telecom and broadband infrastructure to be improved, as well as its digital literacy. 
• Know more about the Big Push for Infrastructure Development in the Country.