Govt infra spend, domestic demand putting India in midst of virtuous growth cycle: CII president R Dinesh

CII president R Dinesh believes the surge in domestic demand has ensured that India attracts sufficient domestic and international investments, propelling the country's growth for the medium term, spanning the next three to five years

The current infrastructure spending by the government coupled with domestic demand are putting the country in the midst of a virtuous growth cycle which is making me bullish on India, R Dinesh, the president of the Confederation of Indian Industry, said speaking with Moneycontrol.

India has invested heavily in infrastructure in recent years. The onset of the coronavirus pandemic sparked a staggering increase in the government's capital expenditure, with the budget for 2023-24 setting a new record target of Rs 10 lakh crore.

Finance Minister Nirmala Sitharaman noted in her 2023-24 budget speech earlier this year that investments in infrastructure and productive capacity have a large multiplier impact on growth and employment.

Also read: Rupee takes cautious steps towards internationalisation as case for de-dollarisation strengthens

"This substantial increase in recent years is central to the government's efforts to enhance growth potential and job creation, crowd in private investments, and provide a cushion against global headwinds," Sitharaman had said.

The CII president reflects this optimism. “Rising domestic demand has made sure that India records both domestic and overseas investment enough to accelerate the country’s growth for at least the medium term, for the next three to five years,” Dinesh added.

To this effect, the finance ministry’s recent economic review has also said that the Indian economy will grow on the back of domestic demand and investment despite a rise in global uncertainties and moderation in global output.

Also read: Bullish on India: Why 2023 - 2047 could be the best couple of decades for Indian real estate

“India’s domestic demand is strong and high-frequency indicators indicate a healthy picture of the state of the economy. Urban demand conditions remain resilient, with higher growth in auto sales, fuel consumption and UPI transactions. Rural demand is also on its path to recovery with robust growth in two- and three-wheeler sales,” it said.

“India is a bright spot in the global economy right now with an expected growth rate of 6.5 percent in the current financial year supported by strong domestic drivers and robust capex momentum of the government,” Dinesh said.