Budget 2021: Roadblocks that clog Indian infrastructure, and the way out

The Government of India in May 2020 made a series of announcements as a part of the Atmanirbhar Bharat Abhiyan to provide stimulus to the economy to beat the repercussions of Covid-19 and lockdown restrictions. However, this stimulus was akin to short-term reliefs to various affected people and sectors. Therefore, the upcoming budget will have to tap into the visible green shoots to jumpstart the economy and large allocation to infrastructure projects is one of the key means for doing so. Spending on public infrastructure can be viewed as a Keynesian multiplier to provide stimulus to the economy and create employment opportunities.

While spending on public infrastructure cannot be over emphasised, in the current scenario healthcare and agriculture may produce major traction. Also, with the fiscal deficit appearing high, the government may have to be careful with loosening the purse strings. This provides an ideal opportunity for the government to bring in non-fiscal, structural and policy reforms which may provide the required impetus in achieving the target set by the government for the National Infrastructure Pipeline (NIP).