Modi needs rivals’ help to meet $3 trillion infra target

Bloomberg

Prime minister Narendra Modi must invest trillions of dollars on roads and other critical infrastructure if he’s to pull India’s economy out of its slump, with at least half coming from provincial governments that are out of his control.
India will need to spend 235 trillion rupees ($3.3 trillion) on infrastructure over the coming decade to return economic growth rates to more than 7.5%, according to Crisil Infrastructure Advisor. That means Indian states will have to more than triple their contributions from the current decade, it said.
“With private investments tepid in recent years, and fiscal limitations on central spending,” states will need to step up contributions from about 41% now, Sameer Bhatia, president of the S&P Group company, said in the report. “Unless states contribute nearly 50% of infrastructure investments, India’s build-out momentum could taper sharply.” Indian states, too, have deteriorating public finances and some, like the richest state of Maharashtra, face political uncertainty.