There exists a strong linkage between the development of infrastructure and progress of a nation, which means that the growth of a country, must not only be preceded, but also be accompanied and followed by the continuous availability and up-gradation of appropriate infrastructural services. With every budget, strengthening investments in infrastructure sector has become the most important aspect of the Budget. In the 11th Five-Year Plan, the government set an ambitious target of increasing total investment in infrastructure from around 5% of GDP in the base year of the Plan 2006-07 to 9% by the terminal year 2011-2012.
In order to uphold healthy GDP growth, alike investment in infrastructure is required. As per the Planning Commission, to encourage growth, India needs to invest an additional 3-4% of GDP on infrastructure or about $1 trillion to sustain current levels of growth and to equalize its benefits over the Plan period. For the target to be achieved, the government needs to adopt several measures to instigate investment in infrastructure sector like increase in spend to JNNURM, which will not only lead to higher investments but also bring about improvements in the quality of urban infrastructure. Further, private institutions need to be allowed to fund the infra projects and focus on fiscal incentives, which will help in increasing the infrastructure spending in the country.