Biting the bullet
iscals 2013 and 2014, the first two years of the 12th Five-Year Plan that has targeted to spend over $1 trillion on infrastructure projects only, have ended with nearly two decades' lowest ebb. The new Narendra Modi-led NDA government that has taken over from mid-May thus faces a huge challenge in stopping the decay and then invigorating investment activity. Slowing economy and stagnant investment are also likely to lead to a call for a relook at Plan priorities and targets.
However, at this point, we may observe that backed by an absolute majority in the Lok Sabha and a freehand given in ministry and policy formulation, Prime Minister Modi has got the wherewithal to revive the economy and stage a turnaround in investment. In fact, his government has already initiated measures to rejuvenate administration, and as reflected in prebudget hikes in passenger fares and freight announced by Railways (since rolled back, it would appear that the authorities are willing to bite the bullet and take some tough decisions in the interest of long-term economic prospects.