As the GDP figures of 5.7 per cent appeared in the press, the murmurs began. GST was already making lives difficult for the traders and businessmen, and the ghosts of demonetisation had not completely vanished yet. The evidence of the economy sputtering emboldened the critics and turned the loyalists into skeptics. The government too moved at an amazing speed having realised that the wolves were beginning to bay for their blood. Establishment of the PM Economic Council was announced, and then, within a fortnight, a massive infusion of reforms was launched.
The Rs 6.92 trillion road network of 83,677 km, on the back of the GST reform, can be a potent economic multiplier in times to come. The road construction push includes the Bharatmala Pariyojana with an investment of Rs 5.35 trillion to construct 34,800 km. In addition, Rs 1.57 trillion will be spent on the construction of 48,877 km by NHAI and MoRTH. That said, NHAI has been made the nodal body to ensure timely execution. Financing is innovatively being raised by monetising road assets worth Rs 34,000 crore from 82 operating highways under the TOT model.
Further, the bank recapitalisation plan of Rs 2.11 trillion over the next two years, in a bid to clean banks' books and revive investment, is a timely move. With this, the projects that will be put to bid can be funded by banks giving a boost to credit disbursal, which has fallen abysmally low.
Besides roads, the next biggest business opportunity has become the Metro-Rail project execution. Over Rs 2 trillion of business is up for grabs over the next few years with Mumbai Metropolitan Region (MMR) itself contributing Rs 1.5 trillion. Metro projects with a total length of 370 km are operational in eight cities. Further, metro projects with a total length of 537 km are in progress in 13 cities. New cities acquiring metro services include Hyderabad (71 km), Nagpur (38 km), Ahmedabad (36 km), Pune (31.25 km) and Lucknow (23 km). Last month, the government introduced a New Metro Policy that focuses on giving clarity on the development of projects, collaborations, participation, standardising norms, financing, and creating a procurement mechanism to implement projects effectively.
Although the timing of the announcements may be scheduled to ensure that the economic agenda reaches a crescendo just before the elections, the forthcoming calendar year 2018 can be extremely rewarding with most contracts getting to fruition during this period.
After a long hiatus, the stage seems set for a revival and if the land acquisition hurdle can be overcome, we are headed for a frenetic pace ahead.