Although the infrastructure sector is firing on all cylinders, a few issues need to be addressed for the resurgence to be widespread and uniform, says SN SUBRAHMANYAN.
Contrary to doubts in certain quarters, it is true that several key sectors of the economy are resurging and showing encouraging growth signs. It is equally true that despite the best intentions and actions of the government, there are certain sectors that have been slow to move into high gear, as it is taking time for decisions to translate into action on the ground. If matters are to be viewed from a purely construction industry related lens, there are certainly more positives that have emerged that augur well for the future.
One area that has seen significant action is the government´s ambitious Smart City mission aimed to accelerate economic growth, strengthen governance and improve the standard of living of citizens. It has been a matter of pride for us at L&T, that we have been involved in playing a pivotal role in the transformation of some of India´s cities, starting with the development of Jaipur into India´s first Smart City equipped with a whole gamut of smart technology solutions. The cities of Ahmedabad, Gandhinagar and Vadodara are already equipped with city surveillance and intelligent traffic management systems. Mumbai will soon have a comprehensive security and surveillance system involving around 6,000 cameras across about 1,500 locations, while Nagpur and Hyderabad are preparing to become Smart Cities. With several other such projects on stream, it is obvious that the objectives of this mission are being achieved.
Breaking the gridlock
When one talks of cities, traffic is perhaps the most vexing of issues that both, city planners and the citizenry, have to face day in and day out. This is being partly mitigated by the development of metro systems. Presently, it is estimated that there are about Rs 25,000 crore worth of metro projects underway and the government has expressed its keenness to invest further in projects for some 15 more cities in a phased manner with a horizon of four to five years. L&T is involved in executing a number of these projects, and with the success of this transportation model attracting more cities to jump on to the metro bandwagon, this sector is definitely on the right track.
On the railways front, the mega projects to construct the two dedicated freight corridors are set to change the dynamics of freight movement in the country and accelerate economic development of the areas that they will traverse. These projects have opened up huge business opportunities for developers and associated stakeholders. Another imperative for sustained economic growth is better road infrastructure, and fair ground has been covered in the roads and bridges sector. Around 40 road projects worth Rs 35,000 crore spanning some 3,000 km have already been awarded, and projects for a further nearly 4,000 km are awaiting the green signal in this fiscal. The government is keen to touch an aspirational construction speed of 40 km a day, and with NHAI leading the way, there is no denying that this sector is on the high road to growth.
As the country moves towards world-class, sustainable water infrastructure to address its water-related issues, comprehensive programmes like ´Namami Gange´, Atal Mission for Rejuvenation & Urban Transformation (AMRUT) and the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) are going a long way to address them.
What this critical sector requires is commitment and adequate funding, which is becoming increasingly visible.
The national agenda of becoming power sufficient is reflected in the positive signs witnessed in the power sector. Inclusive growth is most evident in this sector, as more and more Indian villages are being brought into the national power grid. With continued and adequate focus on improving power evacuation and distribution, the country should soon enjoy a positive balance of power.
External aggression and internal insurgencies have made defence requirements crucial and immediate, and this is a sector where a lot is in the offing in the near future.
Though a lot seems to be moving in the right direction, there do remain irksome issues that are proving to be growth dampeners. Although the issue of ROW has been addressed to a certain extent by NHAI for the road sector, it continues to be a stumbling block for several other key infrastructure projects, while environmental approvals and clearances are proving to be other reasons for delay. The industry is also struck by a lack of cash and confidence. Banks are still wary to fund large infrastructure projects, having to contend with their huge NPAs, while other lending institutions are still not forthcoming, owing to a lack of confidence in the system. These issues need to be addressed sooner than later for resurgence to be widespread and uniform.
About the author:
SN Subrahmanyan, Deputy Managing Director & President, Larsen & Toubro, is a Non-Executive Director on the Board of L&T Infotech and President-L&T Infotech and President-L&T Technology Services. Along with heading L&T Construction, his ambit of responsibility also covers the Metallurgical & Material Handling (MMH) and Ship Building business verticals.