India is currently growing at 11% nominal GDP with high underinvestment in infra sector as per Mckinsey report.
Among various heads where allocations have increased in this budget, infra has the highest multiplier to growth. if the budgetary allocation to various infra agencies is properly mixed with market borrowing when interest rates ,credit growth( which mimicks M3) are probably the lowest in last few years the multiplier can be fairly large
if anybody thinks that recapitalisation and retail lending will solve indian banks problem they dont understand the importance of high nominal GDP
increased infra lending with safegaurds and clear laws,can easily push credit growth rates to digits which will be adequate to push capacity utilisation rates higher and in turn incentivise private sector to start new capex cycle. sounds easy i know but this is our last chance before India gets into debt trap
