With some of the neighbouring countries either are near bankrupt or under huge debt, it can be said that India has done well in the time of crises. Rather than distributing goodies to tax payers as was done in USA, Indian government encouraged spending on capex in the last budget which augured well for the huge employment seeking population. It is estimated that the same line of action will be taken in the forthcoming budget on 1st February, 2022 and may open the Highway to Heaven for the Indian economy as a whole.
The National Infrastructure Pipeline (NIP) was launched in 2020 with projected infrastructure investment of around INR 111 lakh crore during Financial Year 2020-2025 to build infrastructure across the country. NIP was launched with 6,835 projects, which was later expanded to over 9,000 projects covering 34 sub- sectors. Under NIP, projects in roads and railways sectors and Nal se Jal scheme are expected to receive funding boost as the government targets to increase capex spending by around 30 per cent next year.
As a key step to boost private sector capex in infra sector, the government is expected to remove the guideline of seeking bank guarantees for infra projects and possibly replacing them with surety bonds. This has been one of the key demands industry chambers. ahead of the budget. With typically 20 per cent of the funds getting locked up in bank guarantees, this move could possibly free up nearly INR 8 lakh crore of private sector funds over the entire spread of NIP projects, as per industry estimates.
NPowersU Expert Opinion
Covid19 has overhauled how countries and their citizens work in day to day life. How can government remain far behind? In order to utilize scarce monetary resources, they had to borrow from rule book of other countries; if they move ahead with doing away with bank guarantee condition and replacing it with surety bonds. Hope similar borrowings (Other than money) see light in coming years, without pandemic situations though.
Let the worries of the economy go away just like ‘Gone with the Wind.’
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