The government will spend in public investment-related programmes

01 Mar 2020 Editorial Team

Read full article

Try CW Gold Subscription at 167/Month

CW Gold Benefits

Weekly Industry Updates
Industry Feature Stories
Premium Newsletter Access
Building Material Prices (weekly) + trends/analysis
Best Stories from our sister publications - Indian Cement Review, Equipment India, Infrastructure Today
Sector focused Research Reports

Sector Wise Updates (infrastructure, cement, equipment & construction) + trend analysis
Exclusive text & video interviews
Digital Delivery
Financial Data for publically listed companies + Analysis
Preconceptual Projects in the pipeline PAN India

- Nirmala Sitharaman, Union Finance Minister, Government of India After the Union Budget 2020 announcement on February 1, 2020, as a first-of-its-kind initiative, Union Finance Minister Nirmala Sitharaman along with her team embarked upon an outreach programme across cities – the first being in Mumbai – explaining the thought behind the Budget and taking feedback from various organisations and individuals.Joining the finance minister was Rajiv Kumar, Finance Secretary; Atanu Chakraborty, Secretary, Department of Economic Affairs; Dr Ajay Bhushan Pandey, Revenue Secretary; PC Mody, Chairman, Central Board of Direct Taxes; and Ajit Kumar, Chairman, Central Board of Indirect Taxes and Customs. The room in Mumbai’s St Regis Hotel packed with media representatives also included the CW team. SHRIYAL SETHUMADHAVAN presents excerpts from the media interaction with the Finance Minister. From your meeting in Mumbai, what has been the feedback received and concerns that people have raised?As a matter of fact, it is inspiring for me and the entire team to do more dedicated intense work when you know that the efforts that have been put in to make this Budget have really been taken for what they are. The expanse covered in this Budget is something most people highlighted. The expansive and particular attention given to rural India and agricultural India being specific about those 16 action points and looking deeper in the bond market have been received well. The efforts we have made to ensure that the indices look at India so that we get indexed for the bonds that we want to create, for the steps that we have taken particularly in a graded fashion for giving life for the MSMEs back, stressed MSMEs as different from NPAs, both have been given relief. The way in which today the Reserve Bank has also come to be supportive of the MSME is the need of the hour. So, agriculture, rural development, MSME, the way in which we have opened up for the bond market and the ways in which we have given an alternative for income tax… I get a feeling from the inputs I have received and the people who have met us that these are good steps we have taken. Considering the current announcements made in the infrastructure segment, including the Rs.1.7 trillion allocated for the transport sector, what will be the source of funding?The government is a facilitator and it will spend in public investment-related programmes. We have clearly said that we will spend on investment for infrastructure. Infrastructure creation has evoked immediate short-term and long-term benefits. In the Budget itself, I had mentioned that nearly Rs.220 billion ( Rs.22,000 crore) has already been allotted for the two infrastructure funding agencies that we are talking about: the National Infrastructure Investment Fund (NIIF) and IIFCL. If that money is given to them, they are going to be able to leverage from the market atleast six to seven times consecutively or even eight to nine times, if you are a bit more generous. So in a way, we have met with more than Rs.1 trillion ( Rs.1 lakh crore) and that amount was announced by the Prime Minister in the Independence Day speech from Red Fort and that it will be spread over five years. But then, too, as the year went by, we went ahead to say we are happy to front-load it as much as required. Having said that, we have actually worked with states, private investors and private project promoters and come up with a Infrastructure Pipeline consisting of over 6,400 projects. Not only are we talking about funding, we are also clearly saying where these funds will go: Various states, sector-related projects and so on. So our commitment towards investment and spending from public spending in infrastructure is clearly laid out. How are we ensuring the financial viability of the National Infrastructure Pipeline and what is the expectation from the private sector in terms of investment? How will this pipeline be made attractive for them?We are making it attractive by bringing in a lot of sovereign funds. These funds have expressed interest and hence we have extended the benefits. Then, through the NIIF and IIFCL, we expect to raise funds in the market, for which the government has already chipped in the amount. Many of the projects listed as part of the 6,400-odd projects are also private-sector, state government and Central Government projects. So, a lot of work has gone into it. Even as we are talking, many state governments are adding on to that list. With regard to how we expect the private sector to participate, even as the list of 6,400 was made, a lot of inputs came in from the private sector. We have also formed a committee that will be looking at cleaning up the list of 6,400 projects.The borrowing limit for NHAI has been reduced. Is there any reason this decision has been made?Do equally recognise the fact that Rs.103 trillion (Rs.103 lakh crore) worth of projects for infrastructure have been announced. I have also clearly spoken about the length of roads. We have given special fiscal concessions for sovereign funds that have shown an interest to come and invest in infrastructure. Also, consider the particular lock-in condition saying that you will have to invest by 2024 for infrastructure creation. So that one reduction does not in any way undermine these announcements that are towards building better, bigger and long-term investments. How will announcements made for the real-estate sector in the Budget give the sector a boost in 2020?For real estate, we have announced even before the Budget about creating a fund that will help in completion of stalled projects. In early January, we started releasing funds for the escrow accounts of those projects. So I take your point that during September and October, there was a feeling that nothing is moving. But everything took its time because all this involved a lot more tying up of regulatory compliances, even for the government. At the end of the story, from January, this was started for projects stalled all over the country. So the relief that the government and RBI have given to real estate have been both in the Budget and in the pre-Budget. If you collate all this and see what has been happening for the real-estate industry, there are quite a few things.To share your views, write in at feedback@ConstructionWorld.in

Equipment

25 Apr 2025

Handling concrete better

Efficiently handling the transportation and placement of concrete is essential to help maintain the quality of construction, meet project timelines by minimising downtimes, and reduce costs – by 5 to 15 per cent, according to Sandeep Jain, Director, Arkade Developers. CW explores what the efficient handling of concrete entails.Select wellFirst, a word on choosing the right equipment, such as a mixer with a capacity aligned to the volume required onsite, from Vaibhav Kulkarni, Concrete Expert. “An overly large mixer will increase the idle time (and cost), while one that ..

Real Estate

01 May 2025

Elevated floors!

Raised access flooring, also called false flooring, is a less common interiors feature than false ceilings, but it has as many uses – if not more.A raised floor is a modular panel installed above the structural floor. The space beneath the raised flooring is typically used to accommodate utilities such as electrical cables, plumbing and HVAC systems. And so, raised flooring is usually associated with buildings with heavy cabling and precise air distribution needs, such as data centres.That said, CW interacted with designers and architects and discovered that false flooring can come in handy ..

Infrastructure Urban

25 Apr 2025

The Variation Challenge

A variation or change in scope clause is defined in construction contracts to take care of situations arising from change in the defined scope of work. Such changes may arise due to factors such as additions or deletions in the scope of work, modifications in the type, grade or specifications of materials, alterations in specifications or drawings, and acts or omissions of other contractors. Further, ineffective planning, inadequate investigations or surveys and requests from the employer or those within the project’s area of influence can contribute to changes in the scope of work. Ext..