15 NOV,2020 | MEDC
Covid has dealt a big blow to India’s potential growth story, and restoring it is now a national priority. To this end, infrastructure development will have a central role to play. Our economy is currently challenged on almost all major fronts – demand, supply, inflation and investment. The problem is compounded by the fact that fiscal space is shrinking. The lockdown is being phased out, but valid concerns remain about uncertainty over employment and incomes. In this context, strategic infrastructure development could be used as a much-needed booster shot for the economy. There is massive capacity-underutilization in India. This human resource could be productively channelized into the physical development of public assets such as roads, bridges, ports, airports, railways, affordable housing, healthcare facilities, and educational institutions. The multiplier effect resulting from this activity will generate both direct and indirect employment, boost consumption and promote further economic development. In this regard, the private sector has a key role to play, as it takes entrepreneurial risks which are central to translating investments into wealth creation and employment generation. The private sector should be given all required policy assistance – whether it is in the agricultural, industrial, or services sector. The private sector has played an important role in India’s economic development, and, with the right incentive structure in place, there is no doubt that it can continue its contribution to nation-building activities. More and bettermanaged public-private partnerships in infrastructure projectswould expedite development. The government has undoubtedly facilitated increasing private sectorparticipation in building roads and highways, industrial clusters, higher education, and vocational training, but a lot more still remains to be done. An important objective for the government should be to facilitate the transfer and spread of new technologies through industry-led initiatives. This could include the development of new business models that employ technology in innovative ways, which in turn will enhance productivity and lead to sustainable economic growth. Technology enabled infrastructure development in socially relevant sectors such as healthcare and education goes a long way in promoting inclusive growth, and narrowing the undesirable disparities seen everywhere today. Sufficient funds should be earmarked for R&D spending, as well as fostering an ecosystem for promoting entrepreneurship and innovation. A glaring infrastructure deficit is visible in almost every part of Maharashtra and India, and in every sector of economic activity therein. Building large infrastructure projects will assist employment generation, and will also enhance our long-term economic competitiveness. If India is to break out of the Covid-induced stagflation, a sustained thrust on infrastructure development is not optional. The secret of success lies, of course, in the quality of the implementation, but there is no alternative to coming up with an infrastructure development strategy that will help promote sustainable socioeconomic growth, primarily through its employment generation potential.
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