The Central government has sought the Parliament’s approval for an additional spending amount of Rs370bn ($5bn) for the development of infrastructure, according to media reports. Earlier this month, the Finance Minister had announced Rs250bn for the construction of roads, water supply and urban development to boost demand during the festive season.
This was over and above the Rs4.13trillion capex plan announced in the union budget.
Market participants shared with Davis Index that demand for metals will receive a boost if infrastructure development picks up, but the issue lies in the clearance of orders and where the ‘stimulus’ ends up.
They believe that it will take time to restart stalled infrastructure projects due to lack of funds and skilled labourers. Seldom has a government stimulus boosted demand instantly for upstream manufactures, said sources.
Last week, NITI Ayog Chairman had proposed that India should release the next round of economic stimulus package directed towards infrastructure.
($1=Rs73.73)