India’s woes over the weakening Rupee have made them desperate to try and spur growth. Like most countries that hit an economic slump, Indian officials are now proposing more public investment in infrastructure. This solution however historically fails to improve economies that are already struggling. BBC further reports:
“India plans to build new highways, airports and ports, among other things during the ongoing fiscal year.
The economy grew at the slowest rate since 2003 in the first three months of 2012, because of a widening trade gap and poor investment.
India is the third-largest economy in Asia.
But it has been struggling with inflation and currency weakness. Domestic demand, which India’s economy is largely reliant on, has also slowed in part due to the political upheaval in the country.
During a meeting with his ministers on Wednesday, Prime Minister Manmohan Singh said after years of high growth India is ‘now running into more turbulent weather’.
‘In these difficult times, we must do everything possible to revive investment and business sentiment, both public and private,’ he said.”
“Mr Singh said building infrastructure needed about $1tr in the next five years, and the government alone would be unable to invest the amount.”