Monthly Archives: January 2015

Proof of performance

The problem with solutions is that solutions need to be measured for effectiveness of resolution. When solutions are taken as gospel answers, problems do not disappear. They remain and lurk in the shadows. Green ratings are similar solutions that seem like gospel answers to the energy guzzle by high rises.´What can´t be measured can´t be managed´-´this favourite boardroom credo needs an extension:´…and once measured needs to be reviewed´. While a lot of time is spent thinking up solutions and phrasing them into laws and acts, the least time is spent on their implementation. Execution requires the administration of reviews, penalties, awards and incentives. Transparency in execution can help us solve the problem completely but this is where most resolutions falter and fail. On green ratings, a periodical review with a transparent process could invigorate the mission of energy efficiency in buildings.

There is an informal assessment of the performance of the Modi Government already in motion. Many from the anti-Modi camp have already begun raising their voices about the lack of´feel-good´ translating into better bottom lines. Although Modi supporters are holding up with the´it-requires-time-to-resuscitate-a-sick-economy´ line, they too are beginning to look for answers. Despite the bonanza on the oil front (where the oil import bill has shrunk as the price per barrel has fallen from $ 110 to around $ 60 and as India imports over 70 per cent of its oil consumption, India´s annual CAD could improve by up to $ 50 billion from a $ 50 fall), our Government is staring at a potential revenue shortfall of over Rs 1 lakh crore this fiscal year and some expenditure reduction may be undertaken to stick to the fiscal deficit target of 4.1 per cent of GDP.

In the roads sector that sets the construction sector on an accelerated drive, the contracts awarded are struggling to reach the 5,500-km target. The UPA government had awarded just 3,169 km in 2013-14 against 2,300-km-odd in 2012-13. In fact, the average time overrun had increased from about 20 months in 2008-09 to about 50 months in 2013-14. Yet, construction per year ranged in the region of 14 km per day from 2009 to 2013. However, the lag in awards in the past two to three years has cast a long shadow on a pickup in activity. Hence the importance of expediting awards to reflect construction of at least 20 km per day as against Road Minister Nitin Gadkari´s target of 30 km per day. Despite low awards, projects are seeing better clearance timelines. Of the 16 projects awarded in 2013-14, work has already begun on 12, or 75 per cent, so far, an improvement from the previous two years. This, and the savings on land and environment clearances that account for up to Rs 200 crore per project, can help better ROI.

Although the Union Budget 2015-16 is scheduled to be a historic one given the macroeconomic fundamentals, I believe it will involve more financial jugglery than report an economic recovery. It may be high on vision and aspiration but low on results of any radical transformation. There is no denying the clarity & honesty of intention as the government has launched all its promises under ordinances. But business needs visible and tangible proof of an economic recovery apart from the efforts being made to improve efficiency of administrative processes. Further, given the precarious finances, the Government needs to demonstrate a credible plan to fund the various schemes announced. Any demonstrative proof could enliven the order pipelines. Here´s wishing all of you a constructive new year!

Year Target km per yr Actual km
constructed per yr
Actual km
constructed per day
2009-10 5,830 5,145 14.10
2010-11 5,534 4,439 12.16
2011-12 5,824 5,013 13.73
2012-13 6,092 5,726 15.69
Five Year Plans No. of kms built during the
plan period
Total kms of national
highways
Eighth Plan (1992-1997) 609 34298
Eighth Plan (1992-1997) 23814 58112
Tenth Plan (2002-2007) 908 66590
Eleventh Plan (2007-2012) 10228 76818