India's gamble on investment- led growth

Singapore

INDIA'S infrastructure push is the exception to the global norm. The government has decided to pursue a public investment-led growth strategy, even though it means going slow on fiscal correction. It is an opportunity that rich nations, which can borrow far more cheaply than New Delhi, are missing.

A planned reduction in the fiscal deficit to 3 per cent of Gross Domestic Product (GDP) has been delayed by a year. Instead, Finance Minister Arun Jaitley promised in his annual budget to plough savings from cheaper oil into infrastructure. Roads and rail will be the big beneficiaries of a 26 per cent boost to capital expenditure, the sharpest jump in five years.