Stage Set for Revival?

As the GDP figures of 5.7 per cent appeared in the press, the murmurs began. GST was already making lives difficult for the traders and businessmen, and the ghosts of demonetisation had not completely vanished yet. The evidence of the economy sputtering emboldened the critics and turned the loyalists into skeptics. The government too moved at an amazing speed having realised that the wolves were beginning to bay for their blood. Establishment of the PM Economic Council was announced, and then, within a fortnight, a massive infusion of reforms was launched.

The Rs 6.92 trillion road network of 83,677 km, on the back of the GST reform, can be a potent economic multiplier in times to come. The road construction push includes the Bharatmala Pariyojana with an investment of Rs 5.35 trillion to construct 34,800 km. In addition, Rs 1.57 trillion will be spent on the construction of 48,877 km by NHAI and MoRTH. That said, NHAI has been made the nodal body to ensure timely execution. Financing is innovatively being raised by monetising road assets worth Rs 34,000 crore from 82 operating highways under the TOT model.

Further, the bank recapitalisation plan of Rs 2.11 trillion over the next two years, in a bid to clean banks’ books and revive investment, is a timely move. With this, the projects that will be put to bid can be funded by banks giving a boost to credit disbursal, which has fallen abysmally low.

Besides roads, the next biggest business opportunity has become the Metro-Rail project execution. Over Rs 2 trillion of business is up for grabs over the next few years with Mumbai Metropolitan Region (MMR) itself contributing Rs 1.5 trillion. Metro projects with a total length of 370 km are operational in eight cities. Further, metro projects with a total length of 537 km are in progress in 13 cities. New cities acquiring metro services include Hyderabad (71 km), Nagpur (38 km), Ahmedabad (36 km), Pune (31.25 km) and Lucknow (23 km). Last month, the government introduced a New Metro Policy that focuses on giving clarity on the development of projects, collaborations, participation, standardising norms, financing, and creating a procurement mechanism to implement projects effectively.

Although the timing of the announcements may be scheduled to ensure that the economic agenda reaches a crescendo just before the elections, the forthcoming calendar year 2018 can be extremely rewarding with most contracts getting to fruition during this period.

After a long hiatus, the stage seems set for a revival and if the land acquisition hurdle can be overcome, we are headed for a frenetic pace ahead.

Can India bite into the $ 680-billion EPC market?

The Government has recognised that the economy is suffering and needs a strong booster dose – placebos just won’t work. Today, all the ministers are brainstorming over revitalising the economy. For our part, CONSTRUCTION WORLD, along with Foundation of Infrastructure Research Studies Training (FIRST), took up the challenge and presented Union Minister of Commerce & Industry Suresh Prabhu with solutions to inject adrenaline into the economy. The overall intent is evident: bring in foreign exchange, enhance employment, contribute taxes and plan for long-term positive development for the country.

One of our solutions is to strategise to attract the ‘engineering research and design’ industry to India. This $ 680-billion industry is projected to move $ 170 billion – 25 per cent of total revenues – to Asia. Companies like Bechtel, AmecFoster & Wheeler, Black & Veatch and others are based in India, employing thousands of engineers creating engineering designs for complex multibillion infrastructure projects around the globe. This brings in foreign exchange, tax payments and employment. In fact, India has a talent pool of nearly 500,000 engineers graduating every year; such companies can help boost their skill sets and hone them as worthy assets for the country’s future technical talent pool. The stakes are high-$ 170 billion as mentioned above – and India should stake a claim. Back home, we have such skill sets in public-sector companies like Engineers India, RITES, IRCON, MECON, Engineering Projects, WAPCOS, and so on. Going forward, our EPC companies can create SPVs with such projects to forge future alliances as the home infrastructure market opens up to these global giants from the design and engineering space.

Our recent exercise in analysing India’s Fastest Growing Construction Companies has thrown up new names into the orbit that have grown geometrically over the past three years. These have shot to challenge the erstwhile fastest growing companies, indicating that new money has found its way to supporting companies that do not carry ‘legacy baggage’. Our jury comprising India’s top three rating companies debated the merits of excluding companies on grounds of questionable governance practices; therefore, some companies had to miss their spot of glory. This issue, bearing an element of surprise, we also present the nominees of this exercise. In our view, to be nominated is an important milestone in itself.

Early this year, CONSTRUCTION WORLD launched a new logo that intended to depict the increase in mechanisation, scale of infrastructure projects, project management expertise and adoption of technology. After scouring over the responses and suggestions received, we have conceded that our old logo stands tall with its leadership image well-entrenched in the minds of our readers and followers! Therefore, we have decided to bring it back amid the festivities of the month. On behalf of the entire team, I wish you all Happy Diwali and a prosperous new year!

The construction ban is justified

The Nikkei India Manufacturing Purchasing Managers’ Index for July was at its lowest in the past eight years and demand took a deep dive owing to GST adjustments. By the deadline of August 25, over 36 lakh businesses had filed their GST returns. The overall impact is indicated to be an upswing of 16.6 per cent on a comprehensive level, though some states would need compensation and others may have a beneficial gain. The disruption of demand has hurt the industry and is not likely to be compensated by the same quantum of the drop.

Demand needs momentum.
The interest relaxation of 25 bps was too meagre, given the low levels of inflation currently. Public spending will need to be kept up to hold the economic growth numbers. Even though Tata Steel and JSW have begun to plan their expansion, none will invest yet. They may be keener in making a pick from the stressed companies sounding their death knells at the altars of the NCLT.

The August 29 mayhem in Mumbai was a repeat of the havoc in 2005. Little has changed in 12 years. Although social media updated everyone earlier on what was to follow and office-goers left offices earlier, as the tracks were flooded, trains stopped, electricity cut off and the Bandra-Worli Sea Link closed, traffic was left in a complete jam.

The usual areas prone to water-logging caused several people to abandon their vehicles and walk home in the filth.

The High Court has banned new construction in Mumbai and an appeal to reverse this in May 2017 was thrown out by the courts. When I raised this issue with the BMC Commissioner at a conference, he had dismissed the suggestion, saying, ‘Stopping construction is not the answer.’ Then, Mr Ajoy Mehta, what is the answer? Is August 29 your answer?

Simply put, enhancing the infrastructure capacity of the city is the answer. So what is the capacity required for a city of our population in terms of storm-water drainage, solid waste management, power, water supply, and so on? Why can’t we have the BMC targeting these numbers for the creation of capacity? These should be linked to TDR charges and capacity creation should lead permissions. In our quest to win better ‘ease of doing business’ rankings, the number of permissions have been brought down – it would now take 60 days instead of over 200 in Mumbai and Delhi to get construction permits. But permissions should be given only after enough capacity is created. Why has the BMC not been able to provide even a dumping ground for construction debris, the original reason for the ban on construction? If construction is allowed to continue without the authorities providing for increase in capacity, we will soon be seeking the ‘right to breathe’ instead of ‘right to privacy’.

PRIME THE PUMP

Earlier in May, when I had asked Sajjan Jindal, chief of JSW – the group with the best appetite for capital investment – when the private sector would begin investing, he had replied that we were poised for an imminent renewal in sentiment for private investment. Recently, Ajay Piramal, head of Piramal Group and Shriram Group, reflected that a higher GDP number would initiate private investment flow into the economy. And, the World Bank projects that gross fixed capital formation (GFCF), which indicates investment demand in the economy, will grow by 6.8 per cent in FY18 and 8.8 per cent in FY19.

However, the situation appears to be suboptimal currently. According to CMIE, announcements of new industrial and infrastructural projects remained muted in the first quarter of 2017-18. Only 448 projects were announced during the quarter. This is the lowest quarterly project announcement seen since June 2014, the time when the last capex cycle bottomed out. Further, the completion of projects has dipped over previous consecutive quarters. Lower project initiation and a falling commissioning rate will be a double whammy – the only way to change this situation is to enhance the rate of commissioning of the project pipeline and, at the same time, improve the launch of new infrastructure projects. Stalled projects have also not seen any significant resolution. Ideally, the current government is in the best position to resolve and move this rapidly. If the RBI has recognised the need to resolve the mountain of debt through insolvency resolution professionals, why not seek help in resolving stalled projects too?

Foreign funds are keen to invest in toll-operate-transfer (TOT) projects so they can realise the toll yields on completed projects. Hence, NHAI is preparing to offer such completed projects and generate liquidity. Further, the Insolvency & Bankruptcy Code will help quicker consolidation as companies find a solution for bailing out. L&T’s results also indicate that larger companies with stronger balance sheets can take on the burden of stressful financial cycles as contracting for infrastructure is essentially becoming a big boys’ game. There is a need for out-of-the-box solutions to resolve the infrastructure growth gridlock.

So, if private investment is yet to make its mark, what is keeping our engines sputtering if not humming? Public spending. Government spending grew by 13 per cent, year-on-year, in the two months April-May 2017 to touch Rs 4.6 lakh crore against Rs 2.9 lakh crore in April-May 2016. Capital expenditure for infrastructure creation and other assets rose 63 per cent in April-May to Rs 54,000 crore from Rs 33,000 crore in the same two months a year ago. With GST affecting working capital cycles, government spending will be needed to keep the economy pumped up.

Brace for impact!

Nagpur has been in the news ever since the political capital shifted under the current regime. All roads now lead to this ‘orange’ city which has always been a ‘capital in waiting’. The 710-km road that recently invited controversy was the Rs 46,000-crore Mumbai-Nagpur Expressway, which revised its invitation for bids with a supplementary advertisement and caused much heartburn, as the riders imposed were allegedly introduced to outfox fair competition. The project, which is expected to be completed in two years, envisages 16 packages of construction. High-speed corridors have proven to bring prosperity within the corridor zone and this can pave the way for some political capital, as 24 new nodes will be developed in phases projected to generate employment for 25,000 people each across logistic, industrial, IT, agro-industry, tourism, education, healthcare, auto, warehousing and food processing, besides from social infrastructure development including hotels, malls, petrol pumps, offices, hospitals and educational institutes.

Thirty more smart cities have been added to the existing 60, taking the tally to 90 cities that have been selected under the Centre’s Smart Cities mission, taking the total budgeted spend to over $31 billion. Of the ones selected, 26 have proposed affordable housing projects, 26 cities will be taking up school and hospital projects, and 29 will be taking up redesign and redevelopment of roads to enable walking and cycling. Development is likely to score higher in smaller cities as the impact of infrastructure projects is more visible and has a life-changing impact. This underscores the importance of the recently launched Energy Conservation Building Code 2017 (ECBC 2017) developed by the Ministry of Power and Bureau of Energy Efficiency (BEE). ECBC 2017 mandates a 25 per cent saving in energy for compliance. However, we recommend that the ECBC rating must devolve, unless renewed annually for effective compliance.

Led by its dynamic municipal commissioner Kunal Kumar, Pune Municipal Corporation (PMC) has created history by raising Rs 200 crore for its Rs 2,800-crore water supply project via bonds. The bonds have been listed on the stock exchanges. PMC plans to raise Rs 2,264 crore over the next five years and plans to repay the debt by enhancing its revenues through water charges.

The remarkable aspect of this issue was the appetite as the issue elicited oversubscription to the extent of Rs 1,200 crore. This sets the stage for a new stream of funds for municipalities while ushering in an era of transparency.

The worst news for India’s economy has been the loan waivers the state governments have conceded to, all at the altar of political capital. On the other hand, the GST juggernaut is ready to roll. Now, it’s time to brace for impact.

Don’t stymie equipment & technology

The recent inauguration of the 9.15-km Dhola-Sadiya Bridge, India’s longest bridge above water, by Prime Minister Modi coincided with the completion of three years of his government in office. Apart from underscoring the government’s emphasis on infrastructure, it also reaffirmed its resolve in improving connectivity to the Northeastern region. Built at Rs 1,000 crore under PPP with Navayuga Engineering over rivers Bramhaputra and Lohit, the bridge cuts travel time by four hours.

In fact, the Nitin Gadkari ministry has awarded 16,800 km of highway contracts and constructed around 8,500 km for the year ended March, taking the count up to 23 km per day. The 135-km Eastern Peripheral Expressway, being constructed to decongest Delhi, is scheduled for completion in the next few months. Similarly, other expressways to take off include Delhi-Meerut, Mumbai-Vadodara, Dwarka Expressway, Bengaluru-Chennai and Delhi-Jaipur. With HAM not being popular yet, EPC is the easier way to accelerate road development. The 43-km, 12-lane Dedicated Freight Corridor costing Rs 3,000 crore from JNPT (Navi Mumbai) to Panvel, being built to ease container traffic is also under construction. Further, the UDAN scheme envisages 45 new airports and 70 regional routes, and caps ticket fares at Rs 2,500 for one-hour flights. Six new ports are being developed, and automobile and leather clusters have been planned alongside. Indeed, infrastructure bottlenecks are being addressed like never before and the pace is surely picking up.

However, the recent rate slabs announced under GST are likely to undermine infrastructure plans as construction equipment has been put under the same category as luxury cars! The rate applicable is 28 per cent; given the fact that 70 per cent of buyers of construction equipment are small entrepreneurs, small rental companies and hiring small setups, their capacity to buy will be affected and may deter the pace of execution. A pace of 40 km per day from the current 23 km would require extensive mechanisation and the government must consider a slab that encourages adoption. Categorising it with luxury cars is unfair – if the government thinks this equipment is purchased by companies that will pass on the tax impact, it is ill-advised. The Budget has allocated a spend of Rs 3.96 lakh crore on infrastructure in 2017-18 and this GST rate will result in inflating the cost, apart from affecting rightful demand. Even the ‘Make in India’ initiative that is helping the industry gain its status as an export hub will take a beating with the GST dampener. Given the importance of building infrastructure at a reasonable cost and easing the pressure of high financial costs hurting the infrastructure industry, a rate of 12 per cent for GST is being proposed.

We are getting there

NITI Aayog has put forth a plan to turn India’s economy to reach a size of $7.5 trillion, (though targeting $10 trillion) or more than three times of what it is today, at $2 trillion. Implementation of GST, tax reform and ease of doing business (read the Cover Story) are all parts of the building blocks of this plan. And, they all seem to be moving on course so far. India is on the throes of a massive change. The change is not only limited to economy and industry but is also being instituted in social behaviour, and most importantly, in changing mindsets. Just look at what all is happening: Swachh Bharat, Digital India, Smart Cities, AMRUT, Affordable Housing, E-governance, E-Procurement, Make in India, Direct Benefit Transfer, Demonetisation, black money campaign, renewable energy thrust, UDAN, etc, and other social campaigns such as the Ujwala Yojna, Beti Bachao Beti Padhao and so on. This is a lot of work in so short a time and work is in progress.

The recently announced affordable housing scheme and Pradhan Mantri Awas Yojana or PMAY have seen the launch of over 350 projects to build about 2 lakh houses with a private sector commitment of investing Rs 38,000 crore. The cost of constructing these units will be in the range of Rs 15 lakh to Rs 30 lakh with an average construction cost of Rs 18 lakh per house.

Under PMAY-U, central assistance is provided to each beneficiary in the range of Rs 1 lakh to Rs 2.35 lakh. Of the 2 lakh houses, over 1 lakh will be constructed in Maharashtra, followed by 41,921 houses in the NCR; 28,465 in Gujarat; 7,037 in Karnataka; and 6,055 in Uttar Pradesh; among others. Cement prices have already reached pre-demonetisation levels on the back of demand coming from infrastructure and will firm further due to these housing projects.

GST is on track and is likely to cause another disruption for a quarter, but will soon bring great prosperity. Distressed assets of around $6.8 trillion sitting on books of the banks would also heave a sigh of relief as firms and funds like KKR, Lone Star, Kotak and Edelweiss are planning to mobilise their resurrection. It is estimated by experts that the capital required for the next four to five years to resolve distressed situations is about Rs 30,000 crore to Rs 40,000 crore, and it is already being provided for by NBFCs, PEs and international funds.

The PM completes three years on May 26 this month and a lot is on his plate. Fortunately, for us, his plans have accorded priority to infrastructure and while public spending is leading the way, the private sector is preparing to jump in the fray too. Recently, at a private charity function, I bumped into Sajjan Jindal, Chairman of JSW Group, and when I posed him a casual question on whether the private sector was ready to invest into the India story: “We are getting there,” he quipped.

Is the economic miracle a mirage

In the December quarter, the construction sector took a hit. The average net revenue of 156 firms in the mid and large-sized category, excluding L&T, fell by 9 per cent YoY. Road developers took a hit on account of toll collections, which were suspended for three weeks. Orders across infrastructure sector slid several notches. The road sector itself, as reported earlier in this column, has not been able to achieve its targets.

NHAI and the Ministry of Road Transport and Highways had awarded projects of about 3,200 km and 3,100 km, respectively, till mid-February. NHAI had watered down its forecast for FY17 from 10,000 km to 6,700 km. In nine months of FY17, the NHAI awards have dwindled by 8 per cent YoY. While the new hybrid annuity model (HAM) had many takers owing to PPP, lenders are reluctant given the overhang of past record liabilities. As per reports, only 15 of the 35 projects awarded under HAM have achieved financial closure and some have even been cancelled. Even if we factor in an achievement confidence index of 40 per cent on projected estimates, the aspirational scale is so huge that anything over 40 per cent would add a welcome spur to economic growth. As per Nitin Gadkari, Minister of MoRTH & Shipping, a national perspective plan under the Sagarmala project has been prepared and projects worth Rs 8 lakh crore have been identified. This can accelerate momentum in trade as with a 7,500-km coastline, our country transports only 6 per cent of its cargo through waterways compared to around 55 per cent on roadways and 35 per cent by the railways. As a result, logistic costs as a percentage of GDP is as high as 19 per cent compared to 12.5 per cent in China.

On the brighter side, the process to expedite government spending is in the works. With four more states falling with the ruling party, the agenda of development will step up activity locally. Uttar Pradesh, Uttarakhand, Manipur and Goa will toe the Centre’s diktat of development. The state budgets and their policies reflect the urgency to transform. This is evident from policies being introduced in creating a better business environment in Gujarat, Haryana, Maharashtra, Andhra Pradesh and Telangana. The most notable among the reforms are related to land and its use. Unlocking land for commercial and industrial use will lead to increase in economic activity.

If bad bank loans can now find a solution, we may return to an easy money era that would accelerate return on capital and bring back private investors. Only then will we be set for an economic miracle.

When will the good times roll in?

India is on a path of deep-rooted reform. Many initiatives have been triggered that will see fruition this year: Implementation of RERA (with a deadline of May 17), appointment of a Real-Estate Regulator, credit ratings of municipal corporations, issuance of municipal bonds by cities, introduction of GST, and much more. While these shifts do cause disruption in the regular flow of commerce and require systemic adjustment, India can afford this exercise as growth numbers are robust enough to absorb the shocks of change.

Now, however, all eyes are on public spending, which can bring the mojo back. An amount of Rs 3.96 lakh crore (against Rs 3.48 lakh crore the previous year) has been budgeted for infrastructure with Rs 2.41 lakh crore for transport alone. A separate amount has been provided for metro projects to the tune of Rs 18,000 crore and, similarly, among other schemes like Swachh Bharat, Bharatnet, Deen Dayal Jyoti Yojana, etc.

The government´s record last year gives us a reason to believe that spending has gathered momentum as the chains of bureaucracy are being delinked through transparency and accountability. However, it is important that the urgency shown in preponing the dates for the Budget should crystallise into an early disbursal of funds for the projects.

A favourable poll result for the ruling party will accelerate government programmes. Renewable power prices, including solar and wind, seem to have ushered in hope for improvement in production costs for India´s manufacturing sector. Labour costs have risen geometrically for all industries. Also, with rural electrification being implemented on a war footing and Bharatnet expected to make high-speed broadband on a fibre-optic network available by 2017-18 in more than 1.5 lakh gram panchayats, the aspirations of the population will explode countrywide. Lag in power availability stunted our progress; but states are resurrecting their power finances with UDAY.

Further, housing, which was the topic of our cover story last issue, is likely to gallop as it has now been given ´infrastructure´ status and the Central Government is providing interest subvention for ´affordable housing´. ´With an additional interest subvention of 3-odd per cent offered by states, housing demand can skyrocket,´ stated the Union Minister of Urban Development and Housing, while launching the new logo of CW at a conference organised by PHD Chamber in Delhi recently. What´s more, the smart cities mission is quietly making progress with 30 of the 60 identified cities having organised SPVs and appointed CEOs. Tenders are being issued and over 90 projects are underway. To discuss smart solutions that can be executed in the Indian context across cities, Smart Cities Council India is organising the 4th SM@RT CITIES SUMMIT at Pragati Maidan, New Delhi, from March 15-17. For details, visit www.SmartCitiesSummit.in.

Indeed, the vote is for development all the way. And if all political parties realise this, we are likely to see development as a common agenda with each vying to outdo each other. Then, the good times would have truly begun.

Set for an infra-run

Data suggests that demonetisation has hit the pace of announcement of new investment proposals during the quarter-ended December 2016

The Union Budget has set the tone for 2017 by accelerating the growth agenda. The allocation for infrastructure at Rs 3.96 lakh crore, over Rs 3.49 lakh crore last year, will fuel the sector. Of the increase of Rs 47,000 crore, transport itself will consume Rs 24,000 crore.

The Railway Budget has been the largest-ever at Rs 1.31 lakh crore – an 8.26 per cent increase over the Rs 1.21 lakh crore allocated in 2016-17. Railway lines of 3,500 km will be commissioned in 2017-18 while at least 25 stations are expected to be awarded during 2017-18 for station redevelopment. Allocation for highways has been increased from Rs 57,976 crore in 2016-17 to Rs 64,900 crore in 2017-18. Around 2,000 km of coastal connectivity roads have been identified for construction and development.

The dark horse in the transport sector, the Pradhan Mantri Gram Sadak Yojana (PMGSY) has gathered pace. Last year, when I asked Minister Nitin Gadkari at a CII meet, why the PMGSY programme, which had tremendous potential, was not going anywhere – he responded that it did not fall under his ministry but that the government was working on an impetus for it.

The pace of construction of PMGSY roads has accelerated to reach 133 km per day in 2016-17, as against an average of 73 km during the period 2011-2014. And, the Budget has continued to provide Rs 19,000 crore in 2017-18 for this scheme. Together with the contribution of States, an amount of Rs 27,000 crore will be spent on PMGSY in 2017-18.

The other big bang boost has been for the housing sector. National Housing Bank will refinance individual housing loans of about Rs 20,000 crore in 2017-18. Affordable housing has been given the ´infrastructure´ status, which will enable these projects to avail benefits including interest subvention. Further, a target to complete 1 crore houses by 2019 has been set for the homeless and those living in kutcha houses.

Allocation for Pradhan Mantri Awas Yojana (PMAY) has been raised from Rs 20,000 crore in 2016-17 to Rs 29,000 crore in 2017-18. Owing to these reforms, there is a likelihood of an ample availability of affordable housing in the next three years.

Among other infrastructure projects, the Metro projects will see the introduction of a Metro Policy and higher allocation of Rs 18,000 crore, against Rs 10,000 crore in the previous year. AMRUT and the Smart Cities mission will continue to move forward with an allocation of Rs 9,000 crore, against Rs 7,296 crore, as 60 selected cities gear up to issue tenders for city development.

The Namami Gange project has been allocated an increase of Rs 100 crore from Rs 2,150 crore to Rs 2,250 crore. And, Sagarmala has received an enhanced allocation of Rs 150 crore from Rs 450 to 600 crore. The Swachh Bharat campaign is being vigorously run and the allocation has risen to Rs 16,000 crore. Armed with the demonetisation swell in the banks, the finance minister had some head room to hold back the temptation of hiking the service tax in view of the forthcoming Goods and Service Tax (GST), which was a big relief. Further, though the large corporate sector did not get the tax reduction, the FM reduced taxes by 5 per cent for the MSMEs, which have an annual turnover of Rs 50 crore or less, thereby benefitting nearly 64 lakh companies.

Issues that need further attention by the ministry include implementation of the projects. Even the irrigation projects, which found mention in his last year´s Budget speech where 23 of the 99 projects would require to be completed by March 2017, are likely to miss the deadline. As per CMIE, new investment proposals worth Rs 1.25 lakh crore were observed during the quarter ended December 2016. This is low compared to the average Rs 2.36 lakh crore worth of new investments seen per quarter in the preceding nine quarters of the Modi Government. Data suggests that demonetisation has hit the pace of announcement of new investment proposals during the quarter-ended December 2016. Two hundred and twenty seven new investment proposals worth Rs 81,800 crore were announced during this quarter till November 8, 2016. In comparison, only 177 investment proposals worth Rs 43,700 crore were made between November 9 and December 31, 2016.

As for stalled projects, though the current government was to invigorate the economy by debottlenecking and accelerating these, the data points to the contrary. CMIE capex figures show that year-end stalled project figures for 2016 are at their highest levels since December 1995. The total value of stalled projects has reached Rs 11.70 lakh crore in the December quarter, accounting for 12.11 per cent of the total projects under implementation. Among the prime reasons for which the projects are stalled, ´obstacles in environment clearances´ contribute to 20 per cent while ´lack of promoter interest´ seems to be a growing trend over ´land acquisition issues´.

However, the absolute value of new project announcements shows that 2016 ranks second best among the last five years. This means that but for demonetisation, the economy was set for a run. Even if we examine the performance for the road sector, the contracts awarded and the length of roads constructed in the highway sector has been way behind claims of the road ministry.

The status of construction awarded and completed during September 2016 vis-a-vis targets set forth for 2016-17 are as follows:
However, the stage is set for a revival of the tempo. The Dispute Resolution Bill, release of funds for cases stuck in arbitration, reduction in interest rates, resolution of some severely stuck road projects, consolidation of some road assets and the infusion of some foreign capital, which has come to the rescue for some developers – all has signaled the dawn of the good times by Diwali 2016. And now, with the demonetisation impact easing up, the delayed dawn of good times is on the horizon again.