How India will manage inflation and debt as Narendra Modi steps up investment in infrastructure

India’s stock market is expected to surge in 2018 after Prime Minister Narendra Modi’s investment in roads and power projects.

Sources said the market could even hit the record highs of Rs2,500-3,000 a share by the end of 2019, as more infrastructure projects are completed and new investments are made.

The benchmark Sensex was up 4.46 percent to 27,907.95 on Wednesday.

The S&P 500 index was up 1.1 percent at 7,849.19.

The benchmark Ibex index was down 0.7 percent at 10,079.96.

The market rally will be buoyed by the Prime Minister’s new plan to revive the Indian economy by investing in infrastructure, said Sangeeta Pandya, an analyst at Morgan Stanley.

The government will invest about $10 billion in infrastructure projects over the next three years, she said.

In an interview with Reuters, Modi also said that the government was “doing all we can” to make India a manufacturing hub and that the country should focus on industrial production.

The investment in road and power infrastructure is part of Modi’s “Digital India” programme, the prime minister has said, which includes a plan to build two million km of highways and 500,000 km of new power plants by 2022.

Modi’s government has also announced a plan for 100 million hectares of green belt.