The Economic Intelligence Unit, based on a report on the 'Safe Cities Index 2017,' said the global economy is projected to grow at about 2.9 per cent in 2017 as against 2.3 per cent in 2016. The report also cited India to continue to grow at over 7 per cent over the next decade. India made another leap earlier. It is the only country in South Asia and BRICS economies to feature among most improved economies of the World Bank's Doing Business Report this year. The report acknowledges India as a top improver with the highest jump in rank of any country.
The ten indicators for the ranking are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Each one of these indicators carry equal weightage. The survey conducted covers economies of 190 countries, evaluating these parameters. India has improved its standing in 6 out of these 10 indicators, the report shows.
India improved its standing to 103 in terms of resolving insolvency. This is one of the most encouraging parameters as it was previously ranked 136 in resolving insolvency. The Rs 8 lakh crore of despondency due to stressed loans can get a breather with the new act. Further, a state bank recapitalisation plan of Rs 2.11 trillion ($32.43 billion) to be completed over next two years, was announced, in a bid to clean banks' books.
The government approved a plan to build thousands of kilometres of roads and highways over the next five years at a cost of about Rs 7 lakh crore, a spending push that could help generate jobs and lift the economy. The plan involves constructing 83,677 km of roads, highways, green-field expressways and bridges in phases.
In a quest to boost demand, the government announced an investment-cum-finance stimulus where under the first phase to be completed by 2022, around 34,800 km of highways will be built. This will include 24,800 km of the ambitious BharatMala programme, at a cost Rs 5.35 trillion, announced two years ago, to build highways through economic corridors centred around manufacturing hubs, inter-corridors and feeder routes, border, coastal and port connectivity roads. That apart, around 1,837 km of greenfield expressways will also be developed under the programme.
Interestingly, half the money would be raised from the market and private investments while the rest would come from the Central Road Fund, highway toll and monetising completed highway stretches.
This program, after the government's fiscal deficit reached Rs 5.25 lakh crore by end of August 2017 being 96.1 per cent of the budgeted estimate (BE) for the financial year 2017-18 (FY18), has announced this big ticket stimulus raising questions about the government's ability in raising finance. Roads, which have achieved a construction speed of 23 km per day, are way behind currently, and land acquisition is the key in determining the speed of execution. Plans are afoot to launch a comprehensive master plan for airports. The Sagarmala scheme too is ambitious. Metro rail work, after roads, is the most visible construction activity and has most of its funding tied up with multilateral agencies. Private investment is still shy as capacities are still below optimal. Big announcements are great for optics but can we also detail the funding plan?