The past two decades have been witness to a dramatic increase in substructure, especially sustainable infrastructure which was favorable in the shadow of global warming. However, after 2008 and the economic climate that followed the investments in urban facilities have been out of favor and have witnessed a significant drop. This is a global trend, but is certainly not the case for everyone. In fact, despite the stagnant economic conditions, some countries have still witnessed economic growth. One such country is India. It is faced with a different problem; it needs to redouble its effort in urban development and infrastructure to keep alongside the pace of its economic expansion. |
What is its current state?
India’s economy has been growing at an average annual rate of 7.3% over the last ten years and is continuing to grow. And yet, as one of the fastest growing economic powers it boasts an inadequate substructure which is unable to support the continuous economic growth. An example of the poor infrastructure can be seen when a major power outage in July 2012 left over seven hundred million without electricity. This was due to the collapse of three regional power grids that were unable to withstand the excessive demand. Electricity consumption is forecast to increase significantly in the next five years alongside the predicted raise in per capita income.
Why has India neglected to invest?
The fact is, it has invested in urban development and the construction of new facilities. In reality India has heavily invested in the building, updating and development of infrastructure in the past ten years. However, this has simply not been enough to close the gap; public networks are still over saturated and urban areas are underdeveloped. To further reduce this gap, the Indian government has set a budget target of $1 trillion in proposed substructure over the next five years. Most of the budget, according to infrastructure finance experts, will be spent on power generation and road construction.
What is the significance of future funding?
The funding proposed by the government will help accelerate the growth India’s economy and will produce lucrative business opportunities for many. Infrastructure funding will be directed towards increasing India’s urban areas which are becoming increasingly overpopulated. It is believed that by 2030, more than 40% of India’s population will live in an urban area. This will cause an enormous demand for better quality and sustainable substructures such as decent water resources, renewable energy, electricity, sewerage and improved public transport connections. With this predicted increase in the urban population, it is estimated that cities could generate around 70% of the net job creations within the next twenty years.
So, as Indian cities carry on expanding, the government has realized the need to invest more funding in sustainable facilities and creating a better foundation for urban areas to build upon.
When it comes to finding leading Infrastructure finance experts, look no further! Mark Long is a reputable financial expert who advises companies on the increase in India’s infrastructure funds and its consequence on investments in Indian urban areas.
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