Invest Big Invest Fast

Context:  India must deliver fiscal stimulus, before small enterprises drown in the sea of troubles created by the Covid-19 lockdown.

Role of Investment in Industrial Growth and Recovery

• The higher the investment, the higher the growth momentum: needed to set off falling debt/GDP numbers over the years. 
• Industrial growth and their revival depend: on the resumption of investment in the economy.

Sources of Government Borrowing

• Indian public: by offering tradeable floating rate bonds to the public.
• External sources: issue bonds with tenors of five, 10, and 100 years.
•  Higher productivity over the years will minimize currency risk.
• Central bank: when banks pick up government debt using additional liquidity created by RBI, it amounts to monetization of the deficit.

Potential Areas of Government Investment

• Partner with private equity and sovereign wealth funds: to leverage the government’s investment. 
• Take over stalled real estate projects, right-size project costs: and complete them.
• Complete odd townships under the Delhi-Mumbai Infrastructure Corridor: by building

• Rental housing in existing towns
• Flood-resilient infrastructure in flood-prone areas. 
• Intra-state and inter-state power transmission capacity 
• Grid-stabilization capability to feed in renewable power. 
• Large-scale power storage capacity. 

• Invest in healthcare infrastructure and personnel: build excess capacity and utilize spare capacity for medical tourism.
• Invest in railway signaling: by setting up new public enterprises in quantum computing and communications, synthetic biology, new materials, microelectronics, and defense equipment.