LIC to help Railways get back on track: Railway minister Suresh Prabhu is taking the support of public financial institutions like LIC to raise funding particularly as they have access to huge sources of savings. While these funds could be effectively utilised by Railways, it would give the institutions an opportunity to engage in nation building activities with annuity returns.
Tweet: Rlys signing up with LIC for long term funding is a great strategic move. World over, infra supported by pension, provident & insurance.
Budget 2015 fails to prop up realty sector: The Budget paved the way for the launch of Real Estate Investment Trusts (REITs), but realty sector’s hopes for infrastructure status were dashed. Moreover, the finance minister has proposed amendments to the Income Tax Act, prohibiting cash payments beyond R20,000 towards purchase of property.
Tweet: Real Estate sector unenthused with Budget—was expecting Infra status + sops for mass housing & home loans but got Benami Transactions Bill !#
Will gencos’ gamble pay off?: Power companies have bid aggressively for each of the 15 coal blocks. It appears that some companies are defying conventional logic and taking a huge gamble to ensure continuous supply of fuel in the long term.
Tweet: Coal bids by power sector throw up troubling perspective ~ long term fuel security getting irrational premium over medium term profitability.
Tweaking the system to plug project delays: The government’s efforts to kickstart investment have brought much cheer to the embattled infrastructure sector. It is putting in place a bidding system whereby only implementation-ready projects that have all clearances in place will be awarded. This has been a long-standing demand of infrastructure developers.
Tweets: ‘Plug & Play’ (i.e. Govt clearing all permissions before bidding out a project) challenging structural & mindshift change for bureaucracy.
India only country where “stalled projects” has become a macroeconomic statistic. 7% of GDP in 2014-15, 8.3% in 2013-14 & 8.9% in 2012-13.
Pitching for strategic sale of PSUs: In the earlier NDA government with Arun Shourie as disinvestment minister, a fair number of government owned companies were sold. A similar opportunity presents itself today to complement the efforts of disinvestment via shares sales.
Tweet: Why does Disinvestment have to be Share sales only? Asset sales equally viable. A 1000 MW power plant of NTPC can easily fetch R6,000 crs.
Core sector growth hits rock bottom: The eight core sectors registered the lowest growth in 13 months. Similarly, manufacturing activity too slowed down to its lowest point in February over the last 5 months, raising question marks about the new GDP numbers.
Tweet: Core sector growth lowest for year in Jan at 1.8%. Further evidence of collateral figures completely out of sync with revised GDP figures.
RBI ushers in much-needed changes: RBI’s new guidelines for priority sector lending take into account the change in the situation vis-a-vis agriculture’s lower contribution to overall GDP. The revision paves the way for loans to infrastructure sector being brought under the ambit of priority sector lending.
Tweet: Revision in Priority Sector lending areas welcome. Expected additions include Renewable Energy, Rural Infra, and Sanitation & Healthcare.
Land banks to make states more competitive: In order to boost the ‘Make in India’ campaign, the Centre has urged states to develop land banks and pave the way for allocating land to different industry types.
Tweet: Have been recommending Land Bank Corporations for quite some time. Now Centre asks States to create land banks for economic development.
—Vinayak Chatterjee is Chairman of Feedback Infra
His Twitter handle: @Infra_VinayakCh
A weekly selection of the author’s tweets— with a brief backgrounder—in the infra space, by Adite Banerjie
