While
several scoff at the idea of a target of $ 5 trillion economy, I read between
the lines. For the first time, the theme of our country’s leadership has
changed since 2014.
Not only do
I see it in the statement that the aspiration is to build a $ 5 trillion
economy in five years but also in the fact that ‘India will invest Rs 100
trillion in infrastructure in the next five years’. A National Infrastructure
Pipeline for each of the years from 2019-20 to 2024-25 is to be readied by 31
October 2019. Recently another indication emerged that most missed when our PM
Narendra Modi met the Chinese Premier and mentioned that this time his mandate
was towards an economic agenda.
Intellectuals
are busy pooh-poohing the Government’s failure at recognizing the glaring
economic challenges staring India in its face, while it continues its social
welfarist agenda. They do not even acknowledge the extraordinary tax reform
introduced recently by the Finance Minister as it does not support their
conspiracy theories. I believe the failure of the current regime in admitting
its demonetization debacle has blurred the balance in the vision of many. But I
am not judging the fairness of the criticism meted out nor am I baiting anyone
for a debate on this issue. I am trying to read between lines.
Without
doubt, our economy is in the doldrums and we don’t need Nobel Laureate Abhijit
Banerjee to tell us this. (Incidentally, his book Poor Economics is a
must read.) Our project pipeline has slowed so severely that we would need all
the power of Mangalyaan to
bring the project portfolio up to speed.
One
positive change has been India’s recent improvement in the ‘Ease of Doing Business’
rankings, where we have moved up to to 63rd place. Given that we
were at 142nd place in 2014, this jump of 79 places is a significant
improvement. DIPAM has a new secretary and the Government intends to stand by
the divestment process, which is being readied for a real sale this time unlike
the intergovernmental transfers of shareholdings in the past. At the India Construction Festival organised
by FIRST Construction Council, NHAI Chairman NN Sinha stood for a government
that is ready to listen and responsive to changing realities. He was understated
and yet very vocal about the changes he was ready to make. He was also
appreciative of the challenges of the industry. Given his reactions, one could
tell that NHAI will reform sooner than later to meet the aspirations set for
this body, propelling the road sector back to a higher gradient.
India needs
two dozen companies of the size of L&T if the Government actually spends Rs
100 trillion in the next five years as the total turnover of all of them is
only Rs 2.7 trillion. In the past 10 years, the Government spent Rs 7 trillion.
If this figure goes up three times to Rs 20 trillion per year, we need capacity
of the likes of those we evaluate at the Construction
World Global Awards, when we
felicitate the fastest growing construction companies. In the large category,
we have five major players above the threshold of a Rs 7,500-crore turnover:
L&T, Tata Projects, Dilip Buildcon, AFCONS and NCC. The medium category is
within the band of Rs 2,000 crore and Rs 7,500 crore. Over the past couple of
years, we have lost several erstwhile shining stars to either losses, CDRs or
NCLT. Yet, the industry has been able to deliver a topline growth of 22 per
cent and turn around its abysmal aggregate losses into black.
That said,
the returns are still pathetic and we must laud the efforts of the construction
industry to continue to plod against all odds. Let’s raise a toast to the
winners felicitated at India
Construction Festival in this
issue!
