1. Infratweets: Bad news for revival

Infratweets: Bad news for revival

Industrial production declined sharply in October, belying hopes of economic revival.

Updated: December 17, 2014 1:39 AM
 Industrial production declined sharply in October, belying hopes of economic revival.

Industrial production declined sharply in October, belying hopes of economic revival.

Transparency is the key: The Coal Mines (Special Provisions) Bill, 2014, was introduced in Parliament. It seeks to replace the ordinance which outlines the procedure for auction of coal blocks that were cancelled by the Supreme Court.

Tweet: Coal Bill ‘defacto’ throws open coal mining to pvt sector thru transparent processes without ‘dejure’ talking about de-nationalization.

New rule for restructuring loans: Banks will now have more flexibility to restructure corporate loans. Announcements made by RBI to implement the “5-25 rule” offer a much needed reprieve to the sector as the measure will improve debt servicing and viability of operational projects.

Tweet: Appreciate the efforts RBI Guv is making to facilitate capital restructuring of stressed infra assets. SEBI also showing practical approach.

The linkage logic: A coal linkage is inherently given on the merit of a specific power project irrespective of ownership. Therefore, this view of the government has led to significant confusion in a scenario where most of the power projects are seeing an uptake.

Tweet: Unable to fathom logic of Coal Ministry’s view that sale of Power Plant does not mean coal linkage comes with it.

Renewable energy gets a boost: Latest reports indicate that the government is pushing renewables and the target for solar is 100,000 MW in the next 5-7 years. Wind power is also on the upswing.

Tweet: With basically only M&A activity happening in coal thermal right now, fresh investor interest is clearly getting channelized to Renewables.

Blowing in the wind: The government is likely to go the solar energy way and procure wind power at rates determined by competitive bidding. However, many in the wind power sector feel that enabling investments along with creation of capacity is the need of the hour.

Tweet: Power Min Goyal gives a clear message to wind-producers to gear up for competitive bidding (a la solar) in lieu of fixed feed-in tariffs.

A risky proposition?: The new proposal being mooted by the PMO envisages credit flow of R2.3 lakh crore to home loans resulting in nearly R11.5 lakh affordable homes. However, in recent months non-performing assets of housing loans segment of public sector banks have risen six times to R6,200 crore.

Tweet: PMO nudges Insurance & Provident Funds to invest 15% in Low Cost Housing. Intention laudable, but vagaries of real estate need cognisance.

Powering up generation capacity: The addition of new capacity comes as a boon for the power-starved nation. But the challenge will be to ensure that newly commissioned plants continue to generate power in the face of crippling fuel shortages and purchasing ability of stressed discoms.

Tweet: Heartening: In spite of all the coal & gas confusion, 9618 MW of new generation capacity got commissioned April-Oct (55% by pvt sector)

Bad news for economic revival: Industrial production declined sharply in October, belying hopes of economic revival. Industrial output dipped by 4.2% and production of consumer non-durables too contracted by 4.3%.

Tweet: Public expenditure led infra revival critical as Oct data throws up 2.3% decline in Capital Goods sector. Can mitigate consumption slowdown.

Making Amends: For the first time the government has acknowledged that non-compliance of many aspects, including catchment area treatment plan, caused irreparable damage to the environment in Uttarakhand. The ministry of environment is in agreement with the Ravi Chopra Committee’s recommendation of not allowing hydro projects in all areas above 2200 metres.

Tweet: Damaging: In affidavit to Sup Court, Govt admits that “hydropower projects (in Uttarakhand) had significantly degraded local ecology.”

World Bank To The Rescue: The World Bank loan will enable higher movement of freight, especially coal, in the Eastern Freight Corridor from Ludhiana to Kolkata which is one of the most congested tracts in the Indian Railways system.

Tweet: World Bank helps to carry more load: $ 1.1 bill loan to enable raising axle-load limit from 22.9 to 25 tonnes on Eastern Freight Corridor.

– Vinayak Chatterjee is Chairman of Feedback Infra. Twitter: @Infra_VinayakCh A weekly selection of the author’s tweets— with a brief backgrounder—in the infra space, by Adite Banerjie

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