Financial Development and Economic Growth in India

by Pooja Late so cut

India as a nation is under an infrastructural crossroad. There has been growth in the demand for a critical infrastructural system with the tireless growth of the country thereby racing ahead of its capacity in delivering the required number of houses, power plants, and waste collection facilities. The economy of India has been tagged as one of the fastest growing large economies in the world. Nevertheless, things are changing fast and the potential of tapping into international markets and bringing forth new sources of expertise and capital with improved delivery capacity has improved tremendously. There is a need for India’s infrastructure to meet up with the pace of world-class infrastructure as in developed nations. Even as India’s economy is growing fast, this has contributed in making it an attractive spot for investors, who have realized that India is a country with healthy pipeline coupled with good potential partners. In spite of this, there are some challenges faced by India in the quest of building excellent infrastructure.

Challenges at home

It can’t be denied that India does face its own infrastructure challenges. Which country can you single out that doesn’t go through this? It doesn’t mean that the case in India is more prevalent; however, density and poverty are the key issues that have made it be more pronounced when compared to other countries. The underlying question at hand is how do one highlight the infrastructural need of many with limited financial resources? An economic enabler is an infrastructure and not a panacea. It is the summation of the different physical interdependencies, which make up the key services provider by the government. It is important to note that these services aren’t responsible for creating an economy rather they help in facilitating the economy. The primary aim of building infrastructure is to ensure that people become not just efficient but productive with their time. Well, if you have been in a traffic jam – whether in Rome, New Delhi, or Los Angeles you will understand and appreciate that.

This has led to the question as to what does good infrastructure planning, delivery and operation look like. Starting with a national infrastructure plan, the preparation and prioritization of project lies in the jurisdiction of the state in India but must be approved by the central government. A single window process is needed for the planning and approval in order to reduce the bureaucratic procedures. For ensuring this is actualized, there is a need for the implementation of a national infrastructure plan. According to reports, there is a unit established by the Ministry of Finance for the examination, approval, and financing of public-private partnership projects. But an empowered infrastructure unit would go a step further: it would oversee and coordinate the country’s development and execution strategy across the traditional silos of government.

Author’s Bio

Vincent Finch in this post looks at some of the keys to building an excellent infrastructure in India and how it is key to the improvement of the economy. He also spoke of the importance of finance development in supporting the government.