A reduced fuel subsidy burden thanks to the biggest plunge in oil prices since the Great Recession has ensured significant savings for the exchequer, which may translate into a higher spend on boosting key infrastructure in a bid to bolster growth in Asia's third biggest economy.
Investors are expecting a higher allocation for infrastructure spend in the upcoming Union Budget 2015 to be unveiled by the Modi government on February 28, 2015.
India needs a massive investment of USD 1 trillion on infrastructure over the next five years, with the sector crucial to the country's sustained growth and development.
Investors are expecting higher sops and tax incentives for sectors such as capital goods, road, ports, power and cement which may help boost economic activity.
Boosting infrastructure is the key to the success of the government's ambitious 'Make in India' program, and even the project of building 100 smart cities.
Improvement in basic infrastructure facilities will also create a favourable business and investor environment.
This coupled with flexibility in labour policies and swift environment clearances may help transform India into a leading global industrial and manufacturing base, as sought by the country's Prime Minister Narendra Modi.