Infrastructure Growth and Capital Market Challenges in India

International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue I, January 2019 | ISSN 2321–2705

Infrastructure Growth and Capital Market Challenges in India

Apurva Mehta

Associate Professor, Durgadevi Saraf Institute of Management Studies, Mumbai, India

Abstract:-India has embarked upon an ambitious target of spending Rs. 10,525 billion on infrastructure growth and development. This monetary target may well be on course from a tax payer’s perspective, however can we say that all is kosher in this regard. There is no long tenor Rupee yield curve which is the “acceptable” benchmark for the Institutional Investors community. This renders the scope for infrastructure growth much more daunting. In this paper there is a point of view expressed in the context of the “features” of the Indian debt and equity markets which make it an uphill task for the sustainable monetization of the physical assets. This precludes them from being self-sustaining. Infrastructure is the backbone of any economy. Infrastructure needs heavy investments which means over 50 percent of funds come from government and domestic Financial Institutions as well as cross border pension funds, endowments agencies and the like.

Keywords— Infrastructure, growth, investment, government, debt and equity markets

I. INTRODUCTION

Infrastructure is the backbone of an economy which needs special attention from the government of the country so that the country gets balanced infrastructure development and improved infrastructure facilities covering every part of the country. In addition the social aspect relating to the people of country get benefitted as a result of development in the overall infrastructure available.
Infrastructure development plays a significant role in encouraging a country’s economic growth by enhancing country’s productivity thus helping firms from different regions of the country to compete with each other and even compete in the international market.
Infrastructure development requires substantial funding and projects in this area require a long period of time to be executed. This is the reason why most of the infrastructure projects are government funded especially in India, however trends are changing and investments in infrastructure as percentage of Gross Domestic Product( GDP) has declined as private investment infrastructure remained stable on the other hand public investment in infrastructure has seen a decline in past years.

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