The infrastructure segment in India has attracted orders worth Rs 64,500 crore (Rs 645 billion) so far this year and with a new government in place order-flows in this space is expected to accelerate further, a study says.
According to a research report by leading brokerage firm IDFC-SSKI Securities, "There is a clear case for increasing infrastructure investment as the capacity is grossly inadequate and a growing economy would drive up demand for infrastructure services further."
The report further said at a time when there is increasing concern over the funding of infrastructure projects by private players, the government has come to the rescue and its push to drive infrastructure spending can sustain the space in the medium term.
"With a stable government infrastructure capital expenditure will jump sharply over the next 2-3 years as about Rs 7.8 trillion of liquidity has been injected into the system," the research paper said.
It further highlighted that private players are facing bottlenecks because at present their access to capital is constrained and complete drying up of equity funding as risk aversion took over.
Besides, the global slump in debt markets was aggravated by severe liquidity crunch in India and the impact of increasing debt cost is also keeping away private sector from new projects.
