RBI's DY Governor Dr. Patra On India's Infrastructure & MSME Growth At CII Finance Summit 3.0

At the CII Finance Summit 3.0, Dr. Michael D. Patra, Deputy Governor of the Reserve Bank of India (RBI), emphasized the critical role of infrastructure investment in expanding India's production capacity, social welfare, and economic development. He highlighted that infrastructure spending generates a significant GDP multiplier effect—2.45 times in the year of expenditure and rising to 3.14 in subsequent years. To bridge India's infrastructure gap, which is estimated at 4.1% of GDP per annum (and 5.3% when adjusted for climate needs), the country requires annual infrastructure investment between 8-10% of GDP. Dr. Patra also underscored the pivotal role of the private sector, especially in energy and transportation, as infrastructure investment grows to an estimated US$1.7 trillion by 2030. He pointed out the diverse sources of financing, including domestic capital markets, external commercial borrowings, and foreign direct investment. Turning to Micro, Small, and Medium Enterprises (MSMEs), Dr. Patra stressed their importance, noting that MSMEs contribute 30% to India's GDP, 45% to exports, and 62% to employment. He highlighted a substantial financing demand of US$2 trillion, with a significant portion still unmet, presenting a vast opportunity for banks, fintech companies, and NBFCs to address this gap.