There is no clear evidence of economic growth yet but there is no evidence of regression either. There is evidence of an improvement in the economic climate but the numbers are not validating the affirmation conclusively. Sounds similar to the real life whodunit now on celluloid called Talvar?
In many ways, our future hangs in the balance or, shall we say, on razor´s edge. The current regime is driving the economic situation to assume global leadership but the engine needs to harness high doses of power to drag along the legacy burden. There is an intensive negative force waiting for the leadership to blink and miss. So, every moment is vital and each move subject to scrutiny. The consequences of the failure of the current regime would be so terrible that it would not be fair to those faint of heart to elaborate upon them. On the other hand, the rewards of the successful execution of the current vision would be immense and make the challenge worth the wait. And so, the wait continues.
The first quarter results were bleak and the likelihood that the second quarter results will be any better are as bleak. Interest rates have now been brought down to accelerate demand. These will contribute to the bottom line during the fourth quarter. Credit disbursement has barely improved. To quote Dr Raghuram Rajan during his policy statement on September 29: ´Manufacturing has exhibited uneven growth in April-July, with industrial activity slowing sequentially in July, although it has been in expansionary mode for the ninth month in succession. Industries such as apparel, furniture and motor vehicles have experienced acceleration. Furthermore, the resumption of growth in production of consumer durables in recent months, after a protracted period of contraction over the last two years, is indicative of some pickup in consumption demand, primarily in urban areas. The manufacturing purchasing managers´ index (PMI) nevertheless remained in expansion territory in August, although it slowed from July due to weak domestic and export order books. In the services sector, construction activity is weakening as reflected in low demand for cement and the large inventory of unsold residential houses in some localities. Rising public expenditure on roads, ports and eventually railways could, however, provide some boost to construction going forward. Lead indicators relating to freight and passenger traffic are mixed. In August, the services PMI remained in expansion for the second consecutive month on improving new business, but business expectations remain subdued.´
Our 19th CW Annual issue in your hands has been a challenge both for the jury and our own research. Several giant companies are rolling in the dust. Their years of effort in building a mega corp have been in vain as debt has killed value and their companies are trailing in market values. So many companies had to be pulled out from our master list; they now feature in the list of loss-making companies and those that did not provide data. Resultantly, those that survived a year with profits were in the reckoning. Such times also reward risk-averse companies that may not necessarily provide growth during better times.
Despite all these indicators, the mood is selectively turning positive. Road construction, for one, has seen credible contracts and order flow. Road equipment makers are beaming. The action is shifting to ports with the Sagarmala project receiving attention. This is likely to boost activity at ports. The Railways will get onto the fast track followed by aviation. The smart cities project also has put India on the global map as a hot investment destination. Global companies and over 24 countries have evinced interest in participating in the opportunity. Countries are funding master planning of cities.
All this augurs well for India´s plan to improve its ease-of-doing-business index. Currently, only three industries are bucking the downward spiral: IT, pharmaceuticals and banking. So we are at an inflexion point. Can the opposition and the ruling party bury the hatchet on development issues? Can they come together to facilitate India´s efforts in becoming a superpower? Prime Minister Narendra Modi has visited over 100 countries in the past 18 months; while his agenda is to attract FDI to boost Swachh Bharat, Digital India, Skill India, Make in India and smart cities, he is also vying to get India a permanent seat in the UN Security Council, which will put the country in the power club of the top five nations.
We are likely to see the NDA now turning inwards to ensure that essential reforms are passed as foreign investors have been assured on ease of doing business, a stable tax policy and the three Ds: demographic dividend, democracy, and demand. Global headwinds seem to indicate volatility and hence the reform process would be gradual but has the potential to transform India in the coming 18 months. The first 18 months set the agenda for the vision and the next 18 months will be focused on execution. We must just hold on - the same time next year, the markets will be singing a celebratory tune.
ASAPP Media has extended its value into three sectors - infrastructure, construction and engineering - with its 10 publications, websites and events. Its digital offering DezignGenie.com is beginning to add value to the home design world. And it has formed the ´Smart Cities Council India´and is aiming to assist in the rebuilding of our nation by providing smart solutions to urban planning and helping build capacity for city leaders.
Do keep writing to Feedback@ConstructionWorld.in; we assure you a quick execution of good ideas. Follow us on twitter @CWmagazine and on Facebook. We believe in India and in our capacity to rebuild India into a superpower. Here´s to a new beginning. Season´s greetings!
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