By Sharada Prahladrao and G. Ganapathiraman
Keywords: Aviation, Developing Economies, Economic Growth, India, Infrastructure, Ports, Railways, Roads.
Globally, adequate and efficient infrastructure is critical for industrial growth and economic prosperity. Initially, developed economies had the advantage of better infrastructure, which attracted the best talent (due to the promise of a better quality of life) and businesses (due to connectivity and smooth processes). But this infrastructure requires constant upgrade, maintenance, and investment.
Developed economies, such as the US and countries in Europe, are now grappling with how to repair/replace aging infrastructure with limited funding. Governments the world over are focusing on the public/private partnership model to finance and build infrastructure initiatives. Institutional investors are looking at this sector in terms of future returns and inflation-hedging potential.
In developing countries, strategically planned and executed investments in the infrastructure sector could help improve logistics and connectivity, equalize opportunities, and provide the wherewithal to compete in a global marketplace. But, economic and political conditions have a strong bearing on effective infrastructure investments, especially in developing countries such as India. In an increasingly connected world, downswings in other countries impact India's infrastructure sector as they tend to rein in international funding.
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