Friday February 29, 2008

India needs $500 billion spending on infrastructure

bloomberg.com :

India needs to nearly double spending on roads, ports, power and other infrastructure over the next five years to end blackouts, ease congestion for the movement of goods and people and sustain record economic growth. Infrastructure spending may increase to 9% of gross domestic product [GDP], or $500 billion, in the five years ending March 31, 2012, from about 5% now, the Economic Survey, a finance ministry report, said.

The South Asian nation needs to raise spending to sustain a targeted 9% annual growth rate for the next five years. Congested ports and roads and power shortages add to the cost of operations for companies and shave off 2 percentage points from growth in Asia's third-largest economy. India needs as much as $1.6 trillion for infrastructure in the next 10 years, or about 10.5 - 12% of its GDP, to maintain the current pace of growth, Rajat Nag, managing director general of the ADB, said Dec. 3 [2007].

- You could invest in this theme via an infrastructure fund such as the First State Global Infrastructure Fund. My preferred way is to invest in the commodities that all this infrastructure-building will need - including base metals such as iron, copper and so on, and the energy needed to run the machinery - crude oil, natural gas and uranium.

(2008-02-29 13:53:28 SGT) [Biz] Permalink

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