New Delhi, Apr 12 (KNN) According to a Reserve Bank of India (RBI) report, the government's emphasis on infrastructure development, coupled with buoyant business optimism, could foster a sustained revival in the investment cycle.

The RBI's Monetary Policy Report for April 2024 highlights that domestic economic activity, backed by strong fundamentals, remained robust in the first half of 2023-24, despite challenges from muted global demand.

The report states that fixed investment and a lower drag from net external demand propelled real GDP growth, while private consumption received support from steady urban demand.

On the supply side, manufacturing activity strengthened further, benefiting from lower input costs and improved global supply chains. Additionally, construction activity remained firm, driven by buoyant housing demand and the government's thrust on infrastructure.

The RBI report notes, "Going ahead, private consumption will get support from improved prospects for rural demand and rising consumer confidence."

It further states, "The government's continued emphasis on infrastructure creation, coupled with an uptick in private corporate investment and buoyant business optimism, could nurture a sustained revival in the investment cycle, which augurs well for boosting productivity and growth in the economy."

The report suggests that the impact of a lower fiscal impulse on growth could be offset by higher growth-inducing capital expenditure.

(KNN Bureau)