Growing Economy via investments in Infrastructure

It is no surprise that the global economy is about to enter a recession. The economic woes are also high for Indian Economy which is currently going through its worst phase of growth. However, the economy can be stimulated via several methods.

What are these methods?

• To stimulate the economy, the government can either cut taxes to put more money in the hands of the people which may motivate them to increase spending which will boost demand and increase production.
• The government can also provide fiscal stimulus to the corporates to tide over the production woes and not transfer high costs to the consumers. This may be in the form of a tax cut or fund rebate and will arrest the fall in production.  
• The government can also invest heavily in infrastructure projects. This appears to be the most logical way ahead as not only will the government investment create valuable infrastructure for the people but will also generate the demand for raw goods and jobs for people in the construction sector.

What is the Indian Government planning?

• The Indian government is planning to initiate projects with a capital expenditure of Rs 3 lakh crores.
• These projects will kick-start a new investment cycle, spur the growth in the demand of jobs and take the economy out of the recession spiral.

Investment in the water-supply sector

The Indian Government has an ambitious plan to provide drinking water to all homes. This will require a significant investment. However, all the funding in this sector will have to come from government sector as the private sector won’t be keen to invest in these projects as the pay-per-use model for the water supply has not been established in the sector.