On a good wicket but…
ECONOMY & POLICY

On a good wicket but…

The ‘Ides of March’, as stated in this column last month, have done us in. The war has stolen 2 per cent from our GDP growth. And yet…

Construction equipment sales suffered on account of multiple factors, the most noteworthy being the significant slowdown in road construction activity hitting a four-year low of 21.3 km a day over the period April to November 2021 compared to 25.8 km a day in the same period last year. Minister Nitin Gadkari recently acknowledged that the current pace of constructing 8,045 km until February 2022 works out to 24.08 km a day, compared to the targeted 40 km a day, or 14,600 km for the full year.

The ‘Ides of March’, as stated in this column last month, have done us in. The war has stolen 2 per cent from our GDP growth. And yet… Construction equipment sales suffered on account of multiple factors, the most noteworthy being the significant slowdown in road construction activity hitting a four-year low of 21.3 km a day over the period April to November 2021 compared to 25.8 km a day in the same period last year. Minister Nitin Gadkari recently acknowledged that the current pace of constructing 8,045 km until February 2022 works out to 24.08 km a day, compared to the targeted 40 km a day, or 14,600 km for the full year. However, he is likely to pull a rabbit out of his hat as he usually manages to do during the months of February and March and suddenly the rate of construction zooms ahead. Whether that happens or not, it is a fact that the pace of road construction has been tardy. And it is also a given that it is going to pick up steam and race ahead. The Uttar Pradesh polls have established that development is a key success factor. It is therefore expected that the states that are likely to see elections between now and 2024 are likely to see an expeditious execution of road projects. Gujarat, Himachal Pradesh, Meghalaya, Nagaland, Tripura, Karnataka, Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Telangana are to host elections until 2024, in that order. The National Highway Authority of India (NHAI) has announced a Rs.1 trillion plan with 100 aspirational districts that will build 5,795 km. In Karnataka, the Ministry is to sign an MoU that will give a big push to the ring-road projects in different cities in Karnataka. As per the MoU, the state government will have to share just 25 per cent of the land acquisition cost and give exemption in GST/royalty for steel, cement and other construction materials. Other states are likely to follow. Meanwhile real-estate demand has been steadily rising. HDFC recently announced that it has disbursed a record `2 trillion under its home loans. To quote its managing director, Renu Karnad, “In over four-and-a-half decades, I have not seen a better time for the housing sector than now, due to lower interest rates, stable property prices, the Government’s thrust on affordable housing, improved affordability favourable demographics, increasing urbanisation and rising aspirations.” New launches are making a mark, even surpassing pre-pandemic levels. The demand for housing is from actual users and those wanting to upgrade to larger homes. At the recently held Wings India, Jyotiraditya Scindia assured participants that while India had 74 airports in 2013-14, in the past seven years, 66 airports have been added, taking the total number to 140, including helipads and water aerodromes. He expects this number to reach 220 by 2024-25. The Railways has an estimated capital expenditure of `2.46 trillion for the upcoming fiscal year. Further, it will spend around Rs.300 billion on the development of 75 stations across the country. While the Railways procured 7,000 wagons last year, it is expected to procure 90,000 wagons over the next three years. While all the above sounds like music to our ears, India’s GDP forecast has been lowered to 4.6 per cent recently by the United Nations owing to the ongoing war between Russia and Ukraine, which is likely to cast a crippling effect on our costs. While Russia will experience a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South and Southeast Asia. Our cover story brings you the impact this is likely to have on the feasibility of our ongoing projects. Even if the war concludes soon, the inflationary forces are already knocking on our doors. So, in IPL terminology, we are on a good wicket, but bad weather can put paid to our plans.Founder & Editor-in-Chief,  Pratap Padode

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