INFRASTRUCTURE STRATEGY : KEY TO ECONOMIC REVIVAL
As nations and governments wilt under the impact of the global financial meltdown, acknowledged to be the deepest after the Great Depression, the strategies under development to overcome its adverse impact appear to be at best cosmetic. This is because much of the corrective action that is being taken has been to support the ailing banking system or the affected institutions. While the liquidity support measures may be an inevitable component of a rescue operation, sustainable recovery would come only through a stimulus operation. People who are familiar with the US recovery after the Great Depression and the revival of Japan after the world war, will agree that massive investments in infrastructure had been instrumental in creating a cascade of positive enhancements in all sectors of the economy, from capital goods to consumer goods and in all sectors of the society from labour market to educational system.
In today’s context, emerging countries such as India have a tremendous play to leverage infrastructure development not only to insulate the economy from the global meltdown but rather to proactively position the country as an infrastructure destination of the world. India in any case needs more highways, airports, seaports, railways (especially bullet trains), hospitals, dams, power plants, oil refineries, exploration rigs and so on. With the signing of the 123 Nuclear Agreement, the already formidable list of infrastructure projects gets boosted by the emerging need for nuclear power stations. It is imperative that the Indian government opens up its infrastructure sector even more aggressively to position India as the world’s leading destination for investments in infrastructure. The favourable trade linkages that would accrue as a result would have a positive global impact on the supportive advanced nations too.
Posted by Dr C B Rao (dated October 21, 2008)