Links between infra & growth

It's hard to argue that infrastructure is now the binding constraint

On July 9, T N Ninan wrote in Business Standard, where he anxiously looked at the inconsistency between high infrastructure investment and low traffic growth. There is merit in these concerns and brings a related question: What is the role of infrastructure investment in achieving high growth? In the early 1990s, a causal chain could be plausibly argued, where more infrastructure would generate more growth. Today, the bottlenecks seem to be elsewhere.

India’s tryst with globalisation began in the early 1990s. We shed our suspicious approach to the outside world and removed barriers to globalisation. This was of central importance in