Fiscal stimulus to grow India

India's power as a global economic force should not be underestimated by investors, according to boutique asset manager, 4D Infrastructure.

4D Infrastructure's global equity strategies, Greg Goodwell said the young tiger was increasingly prevalent on the international stage, while its labour force participation would further increase the country's growth.

"India and China, with populations of 1,326 million and 1,3.82 million respectively dwarf all other nations when it comes to population size, but there are some key differences in the demographic make-up of the Indian tiger, compared to the Chinese dragon", Goodsell said.

While India's labour force was less than two-thirds of China, only 29 per cent of females worked, he said. That had declined over the last 20 years, while China's female participation rate was around 70 per cent.

"It is clear that increased female involvement is one of the key opportunities and challenge to accelerating India's growth. Harnessing this will be key to India's future prosperity".

Improving India's educational outcomes would also increase India's labour force, he said. The Indian Prime Minister, Narendra Modi pledged to spend US3.3billion on two skill development programs.

Such programs would equip 15 million people with the necessary skills to bring more high-grade manufacturing to the country by 2020, he said.

PM Modi also pledged to put US$130 billion toward India's rail system by 2020, as the Indian network was in need of a serious upgrade, said Goodsell.

For investors these investments represented enormous potential and opportunity, he said.

"There is enormous scope and daunting challenges before the Indian economy. The challenges are significant but nevertheless, all signs points to increased Indian prosperity in coming decades".