India’s pace of spending on infrastructure, buildings and other fixed assets will probably slow in the coming fiscal year, a development that could dent the nation’s ability to maintain world-beating growth.
To sell itself as an attractive destination for foreign capital, Asia’s third-largest economy has leaned on robust capital spending, increasing its infrastructure budget 39% and 26% in the last two years. But as recessionary woes spread globally, India’s tax collections and asset sales are likely to fall, analysts say.
When Finance Minister Nirmala Sitharaman presents this year’s budget on Feb. 1, she faces the daunting task of balancing a commitment to narrowing the fiscal deficit with keeping the engines of growth well-oiled. India’s ambition to become the world’s factory hinges on enhancing infrastructure and smoothing out logistics — areas that still need plenty of government funding.
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