The effects of an increase in Spending of 1% of GDP on Infrastructure

April 25, 2022

India exhibits significant potential for multiplier economic impact (2.0x) and job creation (13,60,000) from an additional 1% GDP spend on infrastructure.

In comparison to other sectors – Cement and Steel – tend to have an high and immediate impact on the economy. Other sectors such as Automobiles, Real Estate, Capital Goods, Consumables, Utilities, Oil & Gas and Metal & Mining tend to have a medium to low impact on the economy, in relatively distant time period.

Country Multiplier effect (2015-2017)
UK 2.5
Brazil 2.2
China 2.2
India 2.0
Argentina 1.8
US 1.7
Japan 1.5
Canada 1.4
Italy 1.4
France 1.3
Mexico 1.3
South Korea 1.3
Germany 1.2
Indonesia 1
Australia 1
Eurozone 1.4
https://www.spglobal.com/en/research-insights/articles/the-missing-piece-in-indias-economic-growth-story-robust-infrastructure