It’s the elections!

Would any sane contractor invest his own money or borrowed money unless he is confident that the contract awarded to him is watertight? And what is watertight when the prospects of each party are uncertain? It is a foregone conclusion that the ruling party will return, but whether it will form a comfortable majority remains to be seen. Politically, it may have made strategic decisions to absorb parties with different ideologies to help build up numbers in states where it had a relatively weaker base. But in the process, it has diluted its core ideology and stance on providing a corruption-free government.

So, while there have been no scams during the previous two tenures of the Government, will it be able to remain clean even after whitewashing the sins of the defectors who have abandoned their parties? Will voters not be disturbed by the compromise made by the party, which was robust and strong by itself and rode to a majority in the 2019 general elections? Why did it need to induct criminals and those who had scams running into thousands of crores, and why did it need to let the courts give them a clean chit as a quid pro quo? From where did this sense of insecurity percolate into the saffron party? The answers to these questions will be before us on June 4.

But, meanwhile, there is a sense of a lull. The construction of National Highways (NHs) in India in 2023-24 caught up towards the last quarter, reaching a total length of about 12,300 km. This impressive achievement translates to an average of nearly 34 km constructed per day, marking the second-highest rate of highway construction in the nation’s history. The highest record, so far, stands at 13,327 km constructed in FY2020-21, with an average of 36.5 km per day. The National Highways Authority of India (NHAI) also created a record, that of highway construction at a growth of 20 per cent in FY24 to its highest ever in a fiscal year. NHAI built 6,644 km of NHs in FY24 against the target of 6,544 km. In FY23, NHAI built 5,544 km. It also registered its highest ever capital expenditure of Rs.2.07 trillion in FY24, up 20 per cent from Rs.1.73 trillion in FY23 and Rs.1.72 trillion in FY22. Overall, the Ministry of Road Transport and Highways (MoRTH) constructed 12,349 km of NHs in 2023-24, i.e. a rate of 34 km per day, against its previous record of building 13,327 km of NHs or 36.5 km per day in 2020-21. However, the targeted figure for awarding contracts at 13,290 km for 2023-24 was missed by 35 per cent as only 8,581 km of NH projects were awarded during 2023-24.

Meanwhile, while the Government is busy with elections, real estate continues to accelerate the economy with a good pace of project launches and execution. Since RERA has been implemented, the availability of properties for rent has increased and COVID has triggered the need for larger-sized homes. While the West is still struggling with the work-from-home phenomenon leading to a squeeze on commercial real estate, in India, even though the IT sector has reduced its headcount, other allied IT services sectors, including e-commerce, logistics, fintech, startups, and some others like manufacturing, automotive, etc, have made up for the diminished demand. Even the RBI’s Monetary Policy Committee has helped boost home sales by keeping the repo rate unchanged at 6.5 per cent since February 2023. Prestige Group clocked Rs.21,040 crore worth of home sales in FY24, rising from Rs.12,931 crore in FY23, a record by any developer. Not far behind, Godrej Properties reported an 84 per cent increase in sale bookings to a record Rs.22,500 crore, and Macrotech Developers announced a record Rs14,520 crore in pre-sales for FY24.

The new Government has a 100-day agenda. Check out what the priorities are at the Infrastructure Today Conclave on July 18-19 in Delhi.