Infrastructure spending can help spur economic activity: KPMG
Infrastructure spending is expected to have a multiplier effect on overall economic growth, primarily based on the Keynesian theory that aggregate demand can be reactivated by increasing public expenditure.
In addition, said KPMG, improved infrastructure will enhance the overall the productive capacity of the economy and its global competitiveness.
Typically, infrastructure projects are characterized by high capital intensity and long gestation periods, often leading to a funding gap. Public investment is key to filling this gap.
"The government should take stock of the project pipeline and review its expenditure and financing programs to obtain optimal results and impacts" said Arun Kumar, Chairman, and CEO of KPMG in India.
Closing the infrastructure funding gap calls for developing financing solutions and placing more emphasis on collaboration and shared responsibilities across public, private, and non-governmental organizations.
A prerequisite to this is an enabling governance and policy framework that fosters business growth and investor confidence while rethinking innovative investment and funding models to encourage private sector participation.
Infrastructure Vision 2025's strategic goals are aligned with those of the UN's 2030 Sustainable Development Goals to improve the living standards of people.
The government now needs to focus on creating the conditions needed to secure funding for Infrastructure Vision 2025's delivery, thus helping India cater to urbanization-led requirements, said the report.
A well-planned pipeline and well-developed infrastructure can lead to the creation of valuable assets, build investor confidence, increase revenue and finance sources, grow businesses, generate employment, improve ease of living and enable inclusive growth, it added.
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01-2026
