Challenges in the Cement Industry

On 15 August 2020, in the address to the nation, Prime Minister Narendra Modi announced an investment of `102 lakh crore on infrastructure development during 2020–25. Elena Stupnikova and Tatyana Sukhadolets (2019) suggest that the construction sector plays a very critical role in gross fixed capital formation (GFCF). Investment in infrastructure will be able to help India come out of the unprecedented slowdown in the global economy due to the COVID-19 crisis. The fall in the global economy is compared to the great depression of the 1930s and is severe than the 2008 global financial crisis.

Several studies by Aschauer (1989), Munnell (1992) and Chatterjee et al (2018) have explored the relationship between infrastructure investment and gross domestic product (GDP) growth and found a positive relationship between government spending on infrastructure and GDP growth. Research indicates a positive relationship between public spending and private spending as stated by Aschauer (1989), Erenburg (1993) and Kandil (2016). Studies by Munnel and Cook (1990), Boccanfuso et al (2014) and Warner (2014) have also found that higher spending by the government on public infrastructure significantly improves the quality of life, economic opportunities and economic growth, respectively. According to Akobeng (2017), the shortage of infrastructure negatively impacts economic growth.