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Source: This post on the Atal Setu and Indian Economy has been created based on the article “Bridge to prosperity” published in “Indian Express” on 15th January 2024.
UPSC Syllabus Topic: GS Paper 3 Indian Economy – Growth and Infrastructure.
News: The article discusses the significance of the recently inaugurated Atal Setu and the positive signs for the future growth of the Indian economy.
Recently, the country’s longest sea bridge, the 22-km long six-lane Atal Setu (or the Mumbai Trans Harbour Link) was inaugurated.
It is a significant step in India’s bid to project itself as a key investment destination.
What are the positive signs for the Indian economy?
- Structural Reforms: Over the past decade, the government has carried out various structural reforms which are helping India deal with its twin-balance sheet problem (both banks and corporates facing financial distress simultaneously).
- Healthy Banking Sector: Indian banks have recovered, and they are capable of financing India’s growth.
- Infrastructure Creation: The government has taken the lead in boosting infrastructure. It has done this by higher capital expenditure and improving the implementation of projects. The pace of creation and quality of roads, railways, ports, airports or bridges has risen sharply from the long-term average.
- Other Advantages: India has a young and ambitious labour force, a free-market economic system and a vibrant democracy.
Why is infrastructure creation important?
Good infrastructure — be it physical or digital — is important for India to take advantage of companies moving out of China. Developed country markets and investors are looking for countries that can replace China in the global supply chain.
What should be the way forward?
Most of the capital expenditure in the economy is due to direct government spending. Since there are limits to how much the government can spend, the private sector needs to contribute as well.
India can leverage this opportunity to become a developed country in the next 25 years.
Question for practice:
What are the positive signs shown by the Indian economy which might help it to become a developed country in the next 25 years?
