Out of the ICU

All through 2020, we have urged the Government to relook at its priorities and prioritise infrastructure. We have written open letters to the Finance Minister, sent letters to the Prime Minister, and published several articles around the year to accomplish this objective. On February 1, 2021, the Union Budget delivered sweet music to our ears. From Atmanirbhar (self-reliant), we morphed to InfraNirbhar (infra-dependent). The National Infrastructure Pipeline (NIP), which was looking like a pipedream, catapulted back into the reckoning.

CW contacted the Ministry of Finance, Ministry of Roads, Transport & Highways and Ministry of Housing & Urban Affairs to gather first-hand intelligence on the seriousness of government and the plan of execution. While Union Minister Nitin Gadkari is already setting his sights on achieving the 40-km-per-day target, Minister of State for Housing & Urban Affairs Hardeep Singh Puri is laying the ground for 1,700 km of metro rail in 25 cities by 2025. The road to great infrastructure is fraught with challenges. However, Dr TV Somanathan, Secretary (Expenditure), allays the scepticism by acknowledging that although the plan depends on the success of the asset monetisation programme and disinvestment, additional funding towards meeting the enhanced infrastructure spending required for the NIP has been prioritised. The establishment of a Development Fund for infrastructure funding will provide long-term finance and leverage the low rates of interest trending owing to the sea of liquidity on global markets. He has been candid that the National Infrastructure Investment Fund could not accomplish its expectations in their entirety; hence, the need to set up this alternate institution.

Deepening the bond market, a perennial demand, has also been made a priority. The asset monetisation programme for MoRTH is already underway with InvITs set to raise funds on existing toll-yielding road assets. Minister Nitin Gadkari, not content with scaling up execution targets, has urged the industry, including RS Mopalwar, Managing Director, MSRDC, which is currently executing the 701-km Samruddhi Mahamarg between Mumbai and Nagpur, to create greenery, look at interventions like steel fibre as building material and crash barriers made of bamboo, and other ways to improve sustainability. 

Metro-rail plans are well funded with the need to improve the number of passengers to improve viability. Metro Neo Lite, a lighter version of the metro rail that also makes a smaller hole in the pocket, may be the answer for some smaller cities that do not have enough numbers to support a larger investment. Surjit Madan, CEO, Andhra Pradesh Metro Rail, is exploring this, as are Nashik metro-rail authorities.

India seems to be on its way to reform to transform. There are still tedious challenges in ‘ease of doing business’ within infrastructure and we have miles to go. While legacy issues continue to bog us down, things will improve when funding and sustainability are on track. 

Meanwhile, a sharp rebound in construction and manufacturing helped India’s GDP record a marginal 0.4 per cent growth in the October-December quarter, which also coincided with India’s festival season, according to data released by the National Statistics Office (NSO). For the full year, the NSO has forecast a steeper contraction of 8 per cent than the 7.7 per cent forecast earlier. For the quarter ending December, construction recorded a growth of 6.2 per cent as against a contraction of 7.2 per cent seen in the preceding quarter. Financial, real-estate and professional services comprised another sector that saw a sharp revival, growing at 6.6 per cent in the quarter as against a contraction of 9.5 per cent in the previous quarter. That said, while we may be out of the recession, we are still not out of the woods.

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