The document summarizes the opportunities and challenges for infrastructure development in India following the 2009 election. It discusses the government's plans to increase infrastructure spending and public-private partnerships (PPPs) to stimulate the economy. However, high fiscal deficits and lack of long-term financing options have hindered private investment. Reforms are needed to develop the bond market and address regulatory hurdles to infrastructure projects. If these challenges can be overcome, there is significant potential for growth in India's infrastructure sector.
India Budget 2012-13 - Analysis by Prabhu SrinivasanPrabhu Srinivasan
Budget 2012-13 has invited more criticisms than appreciations from the various stakeholders of the country. Given the unanticipated difficult situation the global markets are currently in, and the multiple problems that the Indian economy is facing, such as weakening of Rupee against US Dollars, High cost of funds, Inflationary pressures, and High unemployment levels to name a few, the finance ministry has opted for a stringent budget to defy these problems and bring the economy back on a sustainable growth path. I would like to conclude the analysis with my view that the key lies in implementation of the plans. Having observed in the past, that implementation of various initiatives have seen multiple road-blocks stalling them abruptly, we shall try to learn from our past to ensure growth and prosperity of the world’s largest democracy!
Stalling investments in infrastructure and the expanding infra debt burden in...Kyna Tsai
The document discusses stalling investments in infrastructure in India and the growing infrastructure debt burden. It notes that while the government has increased proposed spending on infrastructure, the funding requirement is much larger. Private investment in infrastructure peaked in 2010 but has been declining due to challenges in infrastructure financing. The government is establishing new funds and allowing regulatory agencies to issue bonds to help mobilize the large additional financing needed to close India's infrastructure gap.
The document discusses India's infrastructure sector and budget proposals for 2011-12. It notes that infrastructure investment through the 11th plan was lower than targets in some areas like power and roads. The budget for 2011-12 allocates Rs. 2,14,000 crore for infrastructure, a 23.3% increase. It introduces tax-free bonds and raises limits on FII investments to boost infrastructure financing. However, concerns remain around fully financing the estimated USD 1 trillion needed for infrastructure through the 12th plan.
The budget document provides details on key fiscal highlights including a GDP growth target of 9% and a fiscal deficit target of 4.6% of GDP. It outlines plans to lower the corporate tax surcharge and increase exemptions for individual taxpayers, as well as changes to indirect taxes that will make some consumer goods cheaper and some services more expensive. Key areas that are positively impacted include infrastructure, where allocation was increased 23%, and education, where allocation rose 24%. However, some questions remain about whether the targets can be achieved and if enough is being done to support farmers and alleviate rural issues.
Stalling Investments in Infrastructure and the Expanding Infra Debt Burden in...Dharish David
Infrastructure investments have recently been stalling in India, this has been mainly because the companies operating in the infra space have relied excessively on debt financing. With PPP projects peaking in 2010, there has been a steady decline in private sector investments in infrastructure, as companies struggle with higher debt loads. The high financial leverage of these companies have also put pressure on public sector banks that are reaching their exposure limits, with rising NPAs and stressed loans. The government is urgently trying to revive investments in infrastructure to sustain economic growth, by removing regulatory hurdles and providing opportunities for refinancing, while also cleaning up the banking system.
The document summarizes key features of India's Budget for 2012-2013. It notes that GDP growth is estimated to slow to 6.9% for 2011-2012 due to global economic issues. Inflation is expected to moderate in the coming months. The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through the launch of the Twelfth Five Year Plan. It focuses on reducing the fiscal deficit and subsidies as a percentage of GDP while increasing capital expenditures. Major reforms include implementing the Goods and Services Tax and allowing more foreign investment.
The key features of the Budget 2012-2013 document outlines India's economic growth slowing to 6.9% in 2011-2012 due primarily to deceleration in industry. It aims to improve the macroeconomic environment and strengthen domestic growth drivers through the Twelfth Five Year Plan. The budget targets reducing the effective revenue deficit and central subsidies while increasing capital spending and investment in critical sectors through policy reforms like the Goods and Services Tax and increased foreign direct investment.
India Budget 2012-13 - Analysis by Prabhu SrinivasanPrabhu Srinivasan
Budget 2012-13 has invited more criticisms than appreciations from the various stakeholders of the country. Given the unanticipated difficult situation the global markets are currently in, and the multiple problems that the Indian economy is facing, such as weakening of Rupee against US Dollars, High cost of funds, Inflationary pressures, and High unemployment levels to name a few, the finance ministry has opted for a stringent budget to defy these problems and bring the economy back on a sustainable growth path. I would like to conclude the analysis with my view that the key lies in implementation of the plans. Having observed in the past, that implementation of various initiatives have seen multiple road-blocks stalling them abruptly, we shall try to learn from our past to ensure growth and prosperity of the world’s largest democracy!
Stalling investments in infrastructure and the expanding infra debt burden in...Kyna Tsai
The document discusses stalling investments in infrastructure in India and the growing infrastructure debt burden. It notes that while the government has increased proposed spending on infrastructure, the funding requirement is much larger. Private investment in infrastructure peaked in 2010 but has been declining due to challenges in infrastructure financing. The government is establishing new funds and allowing regulatory agencies to issue bonds to help mobilize the large additional financing needed to close India's infrastructure gap.
The document discusses India's infrastructure sector and budget proposals for 2011-12. It notes that infrastructure investment through the 11th plan was lower than targets in some areas like power and roads. The budget for 2011-12 allocates Rs. 2,14,000 crore for infrastructure, a 23.3% increase. It introduces tax-free bonds and raises limits on FII investments to boost infrastructure financing. However, concerns remain around fully financing the estimated USD 1 trillion needed for infrastructure through the 12th plan.
The budget document provides details on key fiscal highlights including a GDP growth target of 9% and a fiscal deficit target of 4.6% of GDP. It outlines plans to lower the corporate tax surcharge and increase exemptions for individual taxpayers, as well as changes to indirect taxes that will make some consumer goods cheaper and some services more expensive. Key areas that are positively impacted include infrastructure, where allocation was increased 23%, and education, where allocation rose 24%. However, some questions remain about whether the targets can be achieved and if enough is being done to support farmers and alleviate rural issues.
Stalling Investments in Infrastructure and the Expanding Infra Debt Burden in...Dharish David
Infrastructure investments have recently been stalling in India, this has been mainly because the companies operating in the infra space have relied excessively on debt financing. With PPP projects peaking in 2010, there has been a steady decline in private sector investments in infrastructure, as companies struggle with higher debt loads. The high financial leverage of these companies have also put pressure on public sector banks that are reaching their exposure limits, with rising NPAs and stressed loans. The government is urgently trying to revive investments in infrastructure to sustain economic growth, by removing regulatory hurdles and providing opportunities for refinancing, while also cleaning up the banking system.
The document summarizes key features of India's Budget for 2012-2013. It notes that GDP growth is estimated to slow to 6.9% for 2011-2012 due to global economic issues. Inflation is expected to moderate in the coming months. The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through the launch of the Twelfth Five Year Plan. It focuses on reducing the fiscal deficit and subsidies as a percentage of GDP while increasing capital expenditures. Major reforms include implementing the Goods and Services Tax and allowing more foreign investment.
The key features of the Budget 2012-2013 document outlines India's economic growth slowing to 6.9% in 2011-2012 due primarily to deceleration in industry. It aims to improve the macroeconomic environment and strengthen domestic growth drivers through the Twelfth Five Year Plan. The budget targets reducing the effective revenue deficit and central subsidies while increasing capital spending and investment in critical sectors through policy reforms like the Goods and Services Tax and increased foreign direct investment.
Household savings in India have the potential to increase if policy environment is improved. Currently, household savings rates have fallen and Indians save relatively little in financial assets and long-term savings products. There are issues with the tax incentives for pension schemes and clarity is needed to encourage more household financial savings. Studies have found that tax breaks must be carefully designed to avoid distortions and regulations should provide more flexibility for insurance and pension funds to invest. Improving policies around household savings can help channel more funds into productive investments needed to support higher economic growth targets in India.
The government's fiscal deficit for April-June 2020 touched ₹6.62 trillion, already reaching 83.2% of the annual budget due to a collapse in tax revenues from the economic slowdown caused by COVID-19. Total government expenditures have remained relatively stable while earnings decreased significantly. To finance the deficit, the government is considering disinvesting public sector stakes and may increase borrowing levels. However, the Reserve Bank of India is unlikely to directly purchase government bonds in the first half of the year due to adequate investor demand. The Fiscal Responsibility and Budget Management Act allows for increased slippage in deficit targets during economic crises.
The document discusses India's foreign direct investment (FDI) trends and policies. It notes that FDI provides non-debt capital for India's economic development and means achieving technical know-how and jobs. India has attracted large FDI totals due to its favorable business environment and policy reforms relaxing restrictions across sectors. Major receiving sectors include services, software, telecom and trading. Significant recent foreign investments have been made in Jio Platforms, gas distribution, e-commerce and other sectors. The government continues to liberalize FDI limits and ease business regulations to achieve its goal of $100 billion annual FDI inflows and establish India as a top destination for global investment.
The Union Budget was presented on 28th February, 2013 in the Parliament. It was being touted as a good mix of growth and reform. The major challenges outlined by the Economic Survey, RBI as well as by the FM were in respect of considerably reduced estimated growth of GDP, increase in fiscal deficit, mounting current account deficit and high inflation rate.
The Union Budget for 2012-2013 aims to promote domestic demand-led growth, private investment, and infrastructure development while addressing issues like inflation, fiscal deficit, and corruption. Key highlights include increasing direct tax exemption limits, implementing the Goods and Services Tax, using Aadhaar for welfare schemes, allocating more funds for agriculture, education, and skill development, and introducing measures to curb black money and improve governance. However, lower GDP growth, high subsidy spending, and a widening fiscal deficit pose challenges to achieving fiscal consolidation targets.
The document summarizes key aspects of the Indian Union Budget for 2012-2013, including plans to achieve the Vision 2020 goals, changes to personal income tax rates and exemptions, support for infrastructure development, rural development, education, and skill building. It also provides an overview of the Indian economy and analysis of the budget's expected impacts on business, fiscal consolidation, economic changes, and consumers.
FICCI commented positively on the Union Budget 2015-16, saying it laid out a clear roadmap for doubling India's growth rate and set national targets out to 2022. The budget increased infrastructure spending, rationalized the corporate tax structure, and boosted several key programs. FICCI also welcomed other government measures that increased funding for states, focused on rail investment, and identified root causes of black money generation.
The document analyzes the Union Budget of India for 2009-2010. It discusses key aspects of the budget such as taxation changes, stimulus for the automotive and telecom sectors, agricultural initiatives, and allocations for infrastructure, education, and rural development. Experts provide views on the budget, praising measures to boost growth but noting weaknesses like low agricultural spending. In conclusion, the author commends efforts to balance growth and fiscal prudence, and sees the budget as prioritizing demand over supply-side reforms.
Union Budget 2019: How it Impacts Businesses of all ScalesLikhil Sukumaran
The document summarizes key points from the Economic Survey of 2019 and the Union Budget of 2019. It discusses measures to provide liquidity support to non-banking financial companies (NBFCs), including allowing public sector banks to purchase high-rated NBFC assets and providing credit guarantees. It also outlines tax changes that lower corporate tax rates for small and medium enterprises. Concerns are raised about a potential slowdown in investment and manufacturing activity.
This document provides a weekly media update from various news sources mentioning Balmer Lawrie and related topics. It includes articles summarizing that India's core sector growth slowed to an 18-month low in December 2018 due to declines in coal, crude and fertilizers. It also outlines the government's plans to simplify the process for strategic sales of CPSEs and aims to raise Rs. 90,000 crore from CPSE divestments in 2019-2020. Additionally, it mentions that public sector investments and capital spending are expected to see muted growth in the next fiscal year.
We are a team of highly qualified and experienced analysts, who deliver their expertise in providing stock market calls for traders which include tips like Stock Tips, Commodity Tips, MCX Tips, Equity Tips and Intraday Tips. All services are provided through SMS and Instant Messenger. Get free trail of Equity Tips .
The document provides a weekly media update containing news related to the Indian economy, public sector undertakings (PSUs), and skills development initiatives. Key points from the articles include:
- The IMF has said India's economic growth is slowing significantly and urgent policy actions are needed to reverse the slowdown.
- Industry body CII expects the Indian economy to rebound in 2020 due to government and RBI measures, as well as easing global trade tensions.
- The government may target Rs. 1.5 lakh crore for divestment in FY21, with BPCL and Concor stake sales likely in the first half.
- Several PSUs are becoming more agile
The key features of the Indian budget for 2011-2012 focused on opportunities for growth from economic reforms and rural development, challenges around inflation and implementation gaps, and an overview of the economy expected to grow at 9%. The budget aimed to sustain growth through fiscal consolidation, tax and expenditure reforms, subsidies, infrastructure development, and strengthening inclusion through social spending on education, health, and rural programs.
The first budget from the Finance Minister seems to be a concrete step to rekindle growth through fiscal consolidation, investment cycle revival, driving the manufacturing sector, supporting agriculture and restoring business sentiment. As the debate on the Budget presented by the new Indian Government heats up, here's our analysis of how the budget impacts us
India faces significant infrastructure bottlenecks that are hindering its economic competitiveness and growth. These bottlenecks include inadequate road and transport infrastructure between ports, rail hubs, and industrial areas. This leads to higher business costs and negatively impacts India's exports. While the government has recognized the need for infrastructure development and established committees to accelerate projects, many initiatives have faced delays and failures due to issues like lack of private investment, land acquisition problems, and bureaucratic red tape. Addressing infrastructure bottlenecks remains a key challenge in allowing India to achieve its economic growth potential.
India Union Budget 2016 - An Overview | A BDO India PublicationOperations BDO
Dear Reader, India Budget 2016 was delivered by the Finance Minister, Mr. Arun Jaitley on February 29,2016. This Budget appears a sincere attempt to deliver on key expectations and address major challenges within the economic constraints. The budget has been spelt with fiscal consolidation at the core defining the pillars for growth of the economy and leaves a lot of the year to unfold. BDO India LLP brings together an analysis of key changes set out in the Union Budget in their proprietary: INDIA UNION BUDGET 2016 - An Overview.
The document summarizes the Indian government's approach to the 2012 budget. Key points include:
1) The Indian economy's growth slowed in 2011-12 due to global factors but remains one of the fastest growing.
2) The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through fiscal and monetary policy changes.
3) Reforms to subsidies, taxation, investment policies, and infrastructure development are outlined to support inclusive and sustainable growth goals.
The document summarizes the Indian government's approach to the fiscal year 2012 budget. Key points include:
1) The Indian economy's growth slowed in 2011-12 due to global factors but remains one of the fastest growing.
2) The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through fiscal and monetary policy changes.
3) Reforms to subsidies, taxation, investment policies, and infrastructure development are outlined to support inclusive and sustainable growth goals.
The document summarizes the Indian government's approach to the fiscal year 2012 budget. Key points include:
1) The Indian economy's growth slowed in 2011-12 due to global factors but remains one of the fastest growing.
2) The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through fiscal and monetary policy changes.
3) Reforms to subsidies, taxation, investment policies, and infrastructure development are outlined to support inclusive and sustainable growth goals.
India's inadequate infrastructure is hindering its goal of achieving 9-9.5% annual economic growth. While the government has increased infrastructure spending, reforms have been slow and a lack of long-term funding options constrains growth. Key issues include delays from securing land and environmental clearances, as well as a lack of private sector participation. Faster infrastructure development is critical to support India's growing economy and meet increased demand from urbanization.
The document summarizes key aspects of the Indian Budget 2018-19 from an infrastructure and real estate perspective. It discusses what the infrastructure and real estate (IRE) sector expected from the budget, including increased funding for infrastructure projects and initiatives to promote private investment. The budget included several provisions to support the IRE sector, such as increased allocations for highways, railways, airports and smart cities, as well as measures around affordable housing and GST rates. Overall the budget aims to boost employment and economic growth through various IRE-related proposals.
Household savings in India have the potential to increase if policy environment is improved. Currently, household savings rates have fallen and Indians save relatively little in financial assets and long-term savings products. There are issues with the tax incentives for pension schemes and clarity is needed to encourage more household financial savings. Studies have found that tax breaks must be carefully designed to avoid distortions and regulations should provide more flexibility for insurance and pension funds to invest. Improving policies around household savings can help channel more funds into productive investments needed to support higher economic growth targets in India.
The government's fiscal deficit for April-June 2020 touched ₹6.62 trillion, already reaching 83.2% of the annual budget due to a collapse in tax revenues from the economic slowdown caused by COVID-19. Total government expenditures have remained relatively stable while earnings decreased significantly. To finance the deficit, the government is considering disinvesting public sector stakes and may increase borrowing levels. However, the Reserve Bank of India is unlikely to directly purchase government bonds in the first half of the year due to adequate investor demand. The Fiscal Responsibility and Budget Management Act allows for increased slippage in deficit targets during economic crises.
The document discusses India's foreign direct investment (FDI) trends and policies. It notes that FDI provides non-debt capital for India's economic development and means achieving technical know-how and jobs. India has attracted large FDI totals due to its favorable business environment and policy reforms relaxing restrictions across sectors. Major receiving sectors include services, software, telecom and trading. Significant recent foreign investments have been made in Jio Platforms, gas distribution, e-commerce and other sectors. The government continues to liberalize FDI limits and ease business regulations to achieve its goal of $100 billion annual FDI inflows and establish India as a top destination for global investment.
The Union Budget was presented on 28th February, 2013 in the Parliament. It was being touted as a good mix of growth and reform. The major challenges outlined by the Economic Survey, RBI as well as by the FM were in respect of considerably reduced estimated growth of GDP, increase in fiscal deficit, mounting current account deficit and high inflation rate.
The Union Budget for 2012-2013 aims to promote domestic demand-led growth, private investment, and infrastructure development while addressing issues like inflation, fiscal deficit, and corruption. Key highlights include increasing direct tax exemption limits, implementing the Goods and Services Tax, using Aadhaar for welfare schemes, allocating more funds for agriculture, education, and skill development, and introducing measures to curb black money and improve governance. However, lower GDP growth, high subsidy spending, and a widening fiscal deficit pose challenges to achieving fiscal consolidation targets.
The document summarizes key aspects of the Indian Union Budget for 2012-2013, including plans to achieve the Vision 2020 goals, changes to personal income tax rates and exemptions, support for infrastructure development, rural development, education, and skill building. It also provides an overview of the Indian economy and analysis of the budget's expected impacts on business, fiscal consolidation, economic changes, and consumers.
FICCI commented positively on the Union Budget 2015-16, saying it laid out a clear roadmap for doubling India's growth rate and set national targets out to 2022. The budget increased infrastructure spending, rationalized the corporate tax structure, and boosted several key programs. FICCI also welcomed other government measures that increased funding for states, focused on rail investment, and identified root causes of black money generation.
The document analyzes the Union Budget of India for 2009-2010. It discusses key aspects of the budget such as taxation changes, stimulus for the automotive and telecom sectors, agricultural initiatives, and allocations for infrastructure, education, and rural development. Experts provide views on the budget, praising measures to boost growth but noting weaknesses like low agricultural spending. In conclusion, the author commends efforts to balance growth and fiscal prudence, and sees the budget as prioritizing demand over supply-side reforms.
Union Budget 2019: How it Impacts Businesses of all ScalesLikhil Sukumaran
The document summarizes key points from the Economic Survey of 2019 and the Union Budget of 2019. It discusses measures to provide liquidity support to non-banking financial companies (NBFCs), including allowing public sector banks to purchase high-rated NBFC assets and providing credit guarantees. It also outlines tax changes that lower corporate tax rates for small and medium enterprises. Concerns are raised about a potential slowdown in investment and manufacturing activity.
This document provides a weekly media update from various news sources mentioning Balmer Lawrie and related topics. It includes articles summarizing that India's core sector growth slowed to an 18-month low in December 2018 due to declines in coal, crude and fertilizers. It also outlines the government's plans to simplify the process for strategic sales of CPSEs and aims to raise Rs. 90,000 crore from CPSE divestments in 2019-2020. Additionally, it mentions that public sector investments and capital spending are expected to see muted growth in the next fiscal year.
We are a team of highly qualified and experienced analysts, who deliver their expertise in providing stock market calls for traders which include tips like Stock Tips, Commodity Tips, MCX Tips, Equity Tips and Intraday Tips. All services are provided through SMS and Instant Messenger. Get free trail of Equity Tips .
The document provides a weekly media update containing news related to the Indian economy, public sector undertakings (PSUs), and skills development initiatives. Key points from the articles include:
- The IMF has said India's economic growth is slowing significantly and urgent policy actions are needed to reverse the slowdown.
- Industry body CII expects the Indian economy to rebound in 2020 due to government and RBI measures, as well as easing global trade tensions.
- The government may target Rs. 1.5 lakh crore for divestment in FY21, with BPCL and Concor stake sales likely in the first half.
- Several PSUs are becoming more agile
The key features of the Indian budget for 2011-2012 focused on opportunities for growth from economic reforms and rural development, challenges around inflation and implementation gaps, and an overview of the economy expected to grow at 9%. The budget aimed to sustain growth through fiscal consolidation, tax and expenditure reforms, subsidies, infrastructure development, and strengthening inclusion through social spending on education, health, and rural programs.
The first budget from the Finance Minister seems to be a concrete step to rekindle growth through fiscal consolidation, investment cycle revival, driving the manufacturing sector, supporting agriculture and restoring business sentiment. As the debate on the Budget presented by the new Indian Government heats up, here's our analysis of how the budget impacts us
India faces significant infrastructure bottlenecks that are hindering its economic competitiveness and growth. These bottlenecks include inadequate road and transport infrastructure between ports, rail hubs, and industrial areas. This leads to higher business costs and negatively impacts India's exports. While the government has recognized the need for infrastructure development and established committees to accelerate projects, many initiatives have faced delays and failures due to issues like lack of private investment, land acquisition problems, and bureaucratic red tape. Addressing infrastructure bottlenecks remains a key challenge in allowing India to achieve its economic growth potential.
India Union Budget 2016 - An Overview | A BDO India PublicationOperations BDO
Dear Reader, India Budget 2016 was delivered by the Finance Minister, Mr. Arun Jaitley on February 29,2016. This Budget appears a sincere attempt to deliver on key expectations and address major challenges within the economic constraints. The budget has been spelt with fiscal consolidation at the core defining the pillars for growth of the economy and leaves a lot of the year to unfold. BDO India LLP brings together an analysis of key changes set out in the Union Budget in their proprietary: INDIA UNION BUDGET 2016 - An Overview.
The document summarizes the Indian government's approach to the 2012 budget. Key points include:
1) The Indian economy's growth slowed in 2011-12 due to global factors but remains one of the fastest growing.
2) The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through fiscal and monetary policy changes.
3) Reforms to subsidies, taxation, investment policies, and infrastructure development are outlined to support inclusive and sustainable growth goals.
The document summarizes the Indian government's approach to the fiscal year 2012 budget. Key points include:
1) The Indian economy's growth slowed in 2011-12 due to global factors but remains one of the fastest growing.
2) The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through fiscal and monetary policy changes.
3) Reforms to subsidies, taxation, investment policies, and infrastructure development are outlined to support inclusive and sustainable growth goals.
The document summarizes the Indian government's approach to the fiscal year 2012 budget. Key points include:
1) The Indian economy's growth slowed in 2011-12 due to global factors but remains one of the fastest growing.
2) The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through fiscal and monetary policy changes.
3) Reforms to subsidies, taxation, investment policies, and infrastructure development are outlined to support inclusive and sustainable growth goals.
India's inadequate infrastructure is hindering its goal of achieving 9-9.5% annual economic growth. While the government has increased infrastructure spending, reforms have been slow and a lack of long-term funding options constrains growth. Key issues include delays from securing land and environmental clearances, as well as a lack of private sector participation. Faster infrastructure development is critical to support India's growing economy and meet increased demand from urbanization.
The document summarizes key aspects of the Indian Budget 2018-19 from an infrastructure and real estate perspective. It discusses what the infrastructure and real estate (IRE) sector expected from the budget, including increased funding for infrastructure projects and initiatives to promote private investment. The budget included several provisions to support the IRE sector, such as increased allocations for highways, railways, airports and smart cities, as well as measures around affordable housing and GST rates. Overall the budget aims to boost employment and economic growth through various IRE-related proposals.
The 2019 general budget did not include any major announcements to boost economic growth as expected. The government plans to reduce the fiscal deficit to 3% of GDP by 2021-2022 to strengthen the economy. The finance minister also proposed raising external sovereign debt denominated in foreign currencies to diversify debt and lower borrowing costs for companies. Infrastructure investment was emphasized to reach the $5 trillion GDP goal over the next five years. Overall the budget focused on fiscal prudence and continued existing economic measures rather than new initiatives.
INDIAN MANUFACTURING SECTOR NEED FOR A POSITIVE ENVIRONMENT FOR GROWTHNeha Sharma
The Indian Economy, the Government, the public at large and specially the people who are in industry, manufacturing sector, service sector or any other arena of business activity , all are deeply concerned with poor growth rate of manufacturing sector during last 2 to 3 years and specially in 2012-13.
The Infrastructure sector has been the key driver for the Indian economy. The sector is critically important for sustaining the momentum of the economic growth, and the Government has undertaken policy interventions and initiatives to boost the sector.
Foreign Direct Investment (FDI) received in the construction sector (including townships, housing and built-up infrastructure) from April 2000 to March 2017 is estimated at USD 24.3 billion.
CII, over the years, has been working very closely with stakeholders across the infrastructure verticals to stimulate greater private sector investment. This edition of the Policy Watch focuses on the infrastructure sector.
CII has been strongly advocating for an Action Agenda towards creating an enabling and integrated policy & regulatory framework, the impact of which could facilitate considerable investments in the Infrastructure sector thus taking India’s Infrastructure story forward.
This issue of Policy Watch takes an in-depth look at the sectoral issues and has outlined some specific recommendations to reinvigorate the growth momentum in the sector.
The IMF projects India's economic growth to rebound to around 7% in the next fiscal year, supported by monetary policy stimulus and corporate tax cuts. However, Fitch Ratings lowered its forecast for India's GDP growth in the current fiscal year to 5.5% due to a credit squeeze from shadow banks. India improved its ranking in the World Bank's ease of doing business report to 63rd out of 190 countries due to business reforms. The government also plans strategic sales of 11 major public sector units to meet fiscal targets and boost the economy.
A Budget Without Bias -- Jairam Rameshjairamramesh
Arun Jaitley will present his first budget on July 10, which will cover only eight months. Previous budgets in July have enacted significant economic reforms. The budget will likely highlight economic challenges but should also acknowledge India's unprecedented growth over the past decade. It will have the opportunity to provide funding for commitments made in the President's June 9 address to Parliament, continuing popular programs started under previous governments. The budget will face pressures regarding economic policies, and the finance minister's personality may be revealed through the priorities and passions shown in the budget.
Long on aspirations and short on action - A monograph on the Union Budget 201...D Murali ☆
Long on aspirations and short on action - A monograph on the Union Budget 2015-16 - B. Yerram Raju - Article published in Business Advisor, Budget 2015 special issue http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
The document discusses India's smart cities initiative which aims to develop 100 smart cities through public-private partnerships. A sum of Rs. 7060 crore has been allocated for this project in the 2014-15 budget. Smart cities are defined as ecologically friendly and technologically integrated urban spaces that use information technology to improve efficiency. They aim to create livable, workable and sustainable cities. However, challenges include ensuring projects are self-sustaining without controversial land acquisition and that resources also go towards improving existing cities' basic infrastructure through urban renewal.
Edelman India Analysis
Standing in for Mr Arun Jaitley, Finance Minister (FM), Piyush Goyal presented the Union Budget of India earlier today. Highlighting achievements of various Government schemes, Mr Goyal stated that the Government led by Prime Minister Modi has been the most decisive and transformational in executing structural reforms.
Focused on rural and inclusive development over the next 5-10 years, the Budget included significant announcements ahead of the General Elections while also outlining ten dimensions of the Government’s Vision for India’s development by 2030. The launch of, “Pradhan Mantri Kisan Samman Nidhi (PM-KISAN),” which aims to supplement rural income, captured the limelight of this year’s budget. The middle class has also benefited with higher gratuity, broadening of the tax-exempt bracket and waivers on income tax on notional rent. A mega pension scheme for workers in the unorganised sector was also announced along with health coverage under the ‘Ayushman Bharat’ scheme.
The Government has budgeted for overall expenditure of INR 27.8 trillion in 2019-20, an increase of 13% over the previous year’s estimates, while targeting a fiscal deficit of 3.4% in 2019-20 and 3% in 2020-21.
Can PPPs solve Indonesias infrastructure needsH2O Management
Public-private partnerships (PPPs) could help Indonesia address its critical $600 billion infrastructure needs over the next decade. However, PPPs in Indonesia have faced several challenges that have prevented them from fulfilling their potential. These challenges include a lack of transparency in project selection, complex coordination requirements, skills deficiencies within government agencies, conflicting regulations, and difficulties acquiring land. For PPPs to succeed in Indonesia and bridge the country's investment gap, the government will need to address inefficiencies, build agency capacity, and demonstrate renewed commitment by successfully implementing 2-3 priority projects in the next year.
India Public Affairs Round-up by @MSL_GROUP - Dec 2013MSL
In the next few months, India will undertake what is perhaps the largest democratic exercise in the world – its next general election.
Every election has a profound economic and social impact. Elections 2014 will be no different for India. On its result will depend the bold economic reforms and ambitious development programs India needs.
Over the next few months, as election fever intensifies and the next government takes oath, MSLGROUP will roll out a content and insights program based on the elections and titled ‘Voice Of India 2014’. It will include infographics, blogs, editions of this newsletter dedicated to the elections, and much more.
The December 2013 edition of MSLGROUP in India’s Public Affairs Round-up (PAR) newsletter is the first offering of this program.
Respected public affairs veteran Bipul Kiran Singh analyses the impact of coalitions on the pace of reforms and our insights team analyses how the new Land Acquisition Bill will impact votes and industry.
It is widely accepted that Indian economy is recovering, albeit slowly, from the disruptions created by demonetization (November 2016) and implementation of GST (July 2017). The GDP growth is forecast to recover from below 6% in FY17 to more than 7% in FY19. At this rate, India will be the fastest growing economy amongst all major global economies.
The positives are all well known and appreciated by markets and global agencies, as the entire government machinery is busy marketing these.
Nonetheless, for investors, it is important to take a note of the red flags that are too conspicuous and could have serious repercussions on the sustainability of the economic recovery and hence corporate earnings.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
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1. New dawn for India
As the Bandra Worli Sea Link in Mumbai opens for traffic, Varun Jain examines what India's recent election means for the country’s infrastructure.
posted - 02 Jul 2009 09:53 GMT
updated - 02 Jul 2009 09:58 GMT
"Infrastructure is a fundamental enabler for a modern economy and infrastructure development will be a key focus area for the next five years. Public investment in infrastructure is of paramount
importance. Bottlenecks and delays in implementation of infrastructure projects because of policies and procedures, especially in railways, power, highways, ports, airports and rural telecom will
be systematically removed. Public-private partnership (PPP) projects are a key element of the strategy. A large number of PPP projects in different areas currently awaiting government approval
would be cleared expeditiously. The regulatory and legal framework for PPPs would be made more investment friendly.”
These words were part of president Pratibha Patil’s welcome address to Houses of Parliament after the Indian elections in May 2009.
Likewise Montek Singh Ahluwalia, in his first press conference after being reinstated as Deputy Chairman of the India’s Planning Commission, said there would be both
budgetary and extra-budgetary resources available for infrastructure spending. Meanwhile Manmohan Singh, the prime minister returning to office, challenged his newly elected
government to provide a social and political environment in which new investment can be made.
The Indian elections
The Indian political landscape is no stranger to unexpected outcomes and shock results, and the re-election of the United Progressive Alliance (UPA), the Congress-led
coalition, in May 2009 was no exception. While most commentators were expecting a long-fought battle, the UPA’s almost simple majority in the world’s largest democracy came
as a welcome surprise to the economy. India’s benchmark index, the BSE Sensex, rose by over 17 per cent on the first day of trade after the declaration of the electoral ballot.
There could not have been a more positive reaction by the market to the arrival of a stable government - perhaps the most stable in over two decades.
But what lies ahead is an uphill battle for the UPA. It has made several promises which it must work towards fulfilling as expectations to deliver are high
– especially now that the Congress party no longer needs the support of the Left to sustain its parliamentary majority, as it did during the previous term.
The excuse that implementing liberal reforms is being made difficult by the Leftist parties is no longer available to the Congress party.
Immediate hopes include the turnaround of the worsening fiscal deficit, disinvestment in several PSUs, oil price deregulation, increasing Foreign Direct
Investment (FDI) in the insurance and retail sectors and most importantly, a substantial increase in infrastructure spending to stimulate the economy.
Bandra bridge: Ten
years in the making As far as political will and motive are concerned, there is plenty - the bold statements by those in charge clearly reflect it. Supplementing this will is
another crucial factor critical in Indian politics: continuity. With key members of Manmohan Singh’s cabinet having retained their responsibilities, they
now have the opportunity to build upon the progress achieved in the previous term. All these positives add to case for the government delivering on its bold promises. The key
question is whether it can.
Catch 22: infrastructure spend vs. fiscal deficit
There exists an investment need of $500 billion in infrastructure [1] over the period of the Eleventh Five Year Plan [2] for India to sustain its forecast growth rate of 9 per cent of
GDP. Of this ambitious target, 30 percent [3], or $150 billion, is expected to come from the private sector.
India’s limited dependence on exports compared to other emerging markets, its buoyant domestic demand and high savings rate will likely see it weather the current economic
climate better than most others. However, the state of the nation's infrastructure is seen as the biggest impediment in India’s growth and if not tackled efficiently it could stall the
nation’s recovery once the global recession has surpassed.
Another key element in the case for the infrastructure spending is India’s demographic profile. With over 50 per cent of India’s 1.2 billion population under the age of 25 and per
capita income to increase by 100 per cent [4] over the next decade, the nation will see the emergence of a new middle class that will put amplified pressure on existing
infrastructure. Backed with increased purchasing power, the changing mindset of the Indian masses will demand higher quality of living and improved facilities. All these
dynamics will result in increased demand for infrastructure with the subsequent spend itself acting both as a cause for, and a consequence of, economic growth.
However, while the economic and long term rationale suggests increased infrastructure spending, the country is grappling with one of the largest fiscal deficits in the world,
which is expected to reach a staggering 11 per cent [5] of GDP in FY2008-09. In light of this, the government is considering divesting stakes in as many as 16 Public Sector
Undertakings (PSUs) as a means to reduce the glaring deficit. Other remedies being hinted at include oil price flexibility and reduced spending on energy and fertilizer subsidies.
But the bottom line remains that despite these initiatives, it will take some time to bring the fiscal deficit back to manageable levels, and for the time being at least, the country
must follow a prudent fiscal policy.
The conflux of the increased infrastructure spending requirements and the burgeoning fiscal deficit leaves India with only one viable option to meet its forecasted growth:
substantially stimulate the private sector’s participation in infrastructure.
The government, therefore, is keen to invite private capital into infrastructure. The Public Private Partnership (PPP) route is being touted as the best bet at leveraging private sector
participation into the sector.
Current PPP initiatives
The Indian government has had its share of problems in making PPPs a viable option for private participants, but the administrators have learnt from their mistakes and are
taking a more systematic and integrated approach to the problem. Over the last couple of years a lot of groundwork has been put in place to invite foreign capital. This includes
raising the FDI limit to 100 percent for almost all infrastructure and related sectors, as well as easing the External Commercial Borrowing (ECB) norms. These are interesting
developments from the point of view of strategic players looking to enter the sector. From a project-specific perspective, the government has established a Project Development
Fund to finance preparatory expenses of PPP projects and a Viability Gap Funding Scheme to grant assistance of up to 20 per cent of the project capital costs for competitively bid
infrastructure projects that can be justified in social returns but carry an ‘unacceptable commercial rate of return’.
Apart from these measures, India has also established the India Infrastructure Finance Company Limited (IIFCL), a body to help provide long-term debt financing and refinancing
to infrastructure projects. The IIFCL was recently allowed to raise $8 billion through tax free bonds for funding infrastructure projects [6]. There are ongoing talks to allow even
existing projects as opposed to just new projects to tap into the refinance window opened up by the IIFCL.
Current perspective
Thus far, despite these initiatives aimed at stimulating private investment, the big wave of private funds expected to enter the Indian Infrastructure sector from foreign shores has
gone amiss. However, there remain encouraging signs that the efforts are paying off and things have finally started moving in the right direction.
2. During the period August 2008 to January 2009, the government had accorded approval to 37 infrastructure projects worth $14 billion. In terms of PPPs, it provided in-principle
approval to 54 central sector infrastructure projects with project costs of $14 billion and final approval to 23 projects for viability gap funding amounting to $6 billion [7]. From an
FDI perspective, the period April - December 2008, saw FDI grow by 45 per cent year-on-year with $23 billion in commitments.
Meanwhile signs of a capital market recovery are surfacing as firms have used the recent rally in the secondary markets resulting in improved valuations to tap the primary
markets through the less regulated Qualified Institutional Placement (QIP) route. A recent report released by PricewaterhouseCoopers (PwC) urged Engineering and
Construction (E&C) companies to look to India for growth as domestic markets contract [8]. Finally, recognising India's promise, the United Nations Conference on Trade and
Development (UNCTAD), has declared it the second most-preferred global location for foreign investment during 2008.
Challenges and solutions
While there are positives, there is no doubting the fact that major impediments still remain in the Indian infrastructure sector, with the availability of finance being the most
significant. For infrastructure projects to be viable, they require long-term debt financing at stable rates below a certain threshold as a perquisite. This hold true even more for
projects in India, which apart from being very debt heavy, have seen a rise in debt-to-equity ratios in recent years [9], making the sector even more susceptible to interest rate
risk.
Given this backdrop, one would assume the bond market in India to be flourishing. However, that is not the case. Despite being amongst the largest in Asia, India’s bond market
is still a nascent one and faces various regulatory and legislative challenges. As a result of this, financing projects through bonds is an expensive option, increasing the overall
cost of capital for projects.
All these points make a very strong case for introducing bond market reforms, but the turbulent markets of today make this an extremely difficult proposition. Most experts believe
it will still take some time before these reforms can be introduced, but once the bond market does open up, it could prove to be the tipping point for infrastructure finance in India
and provide a major impetus to the large projects being planned by the administration.
However, until that is realised, the government must consider other options to provide capital. Funding of these projects has relied heavily on the still strong domestic banks, with
availability in many cases depending upon the banker-promoter relationship. Unfortunately, the source of funds for most of India’s banks remain savings and term deposits with
maturity profiles of 0 to 5 years, leading up to a substantial asset-liability mismatch.
One option to make up for the asset-liability mismatch faced by banks and the unavailability of bond finance is to allow long-term savings mobilisers such as pension funds and
insurance companies to invest a portion of their assets under management into infrastructure. The long dated liabilities of these institutions make them ideal investors for the
asset class. Another option could be to allow banks to raise long term bonds exempt from statutory reserve requirements. Finally, more institutions that can complement and co-
invest along side private capital, such as the IIFCL for example, will also help feed the much starved sector.
While the financing issues might be the biggest hindrance to project uptake, India also faces a barrage of regulatory, legislative and bureaucratic hurdles that result in
suboptimal project implementation and execution. The government must work towards addressing these issues in order to establish confidence in the minds of all stakeholders
if it hopes to attract the amounts of private capital it envisages. Despite the long to-do list, the judicial framework needs to be made more efficient and the company law
framework needs strengthening.
In a country known to be awash with red tape, the government must address various challenges affecting project implementation such land acquisition and contract
enforceability. Persistent delays in mega infrastructure projects primarily due to these hurdles and poor planning have led to time and cost overruns in their implementation. As
per the Ministry of Statistics and Programme Implementation, out of 552 projects [10] in the central sector at the end of March 09, about 280 projects have witnessed delays in
their execution due to varied reasons. With only 146 projects on schedule and 8 projects ahead of schedule, these projects have already overrun costs by 12 per cent.
As an example, the roads sector, the largest constituent of the infrastructure PPP projects over the last year in terms of the number of projects, has had a dismal performance. Of
the 60 new road projects the National Highways Authority of India (NHAI) is seeking to build under the PPP model, it did not receive a single private bid on 38 of them. The Model
Concession Agreement (MCA) that the administration has been working on for some time now, drafting and then re-drafting it again last year, has been blamed by many for this
failure.
Officials have pointed out that the excessive emphasis on a one-model-fits-all format presents serious problems. However, the NHAI, which has the right to submit proposals in
context to changes in the MCA, ignored to do so. Further, the NHAI did not invite any bids for close to a year and chose instead to bunch together a large number of bids in
December 2008, by the time the financial crisis had really taken its toll on the already over-leveraged sector.
All of these problems are now being systematically addressed by the new minister in charge, Kamal Nath, who after recently taking charge called a meeting of all stakeholders
including the deputy chairman of the Planning Commission and his principal advisor to discuss the way forward. Given the way things are shaping up, a revival of sorts is
expected for the NHAI.
Lack of planning and unsystematic approaches are now being tackled in other infrastructure sub-sectors, and private sector expectations are heightened for the ministries to
come through on promises made by the Planning Commission of the Government of India.
Opportunities
In her visit to Spain in April 2009, the president said India needed to spend $700 billion over the next five years to strengthen its infrastructure. She urged Spanish infrastructure
firms to take a closer look at opportunities unfolding in India’s infrastructure market. For infrastructure firms and concessionaires, the opportunities present are plenty and varied.
But India is also a market where local knowledge and expertise are just as important as technical know-how and experience. Therefore, an ideal route for infrastructure
developers to enter the market is through joint ventures with domestically established management teams with proven execution skills.
India’s unique demographic also throws up some interesting takeaways. For example, large segments of the 1.2 billion strong population require professional training in order
to develop the workforce, leaving a large gap in the education sector. So in addition to opportunities in core infrastructure assets, there exist great opportunities in non-core,
social, tangential and infrastructure-related sectors. India is actively exploring extending the PPP model to social sectors such as health and education.
Further, while urbanisation in India continues to grow by leaps and bounds, 70 per cent [11] of India’s population still lives in its rural areas, making rural markets another big
avenue for growth in the years to come.
Many private investors have shied away from the Indian infrastructure space up until now. With the existing opportunities in the developed markets in the OECD nations drying up
- at least for the time being - a diversification strategy into an Indian business or asset might be an interesting play.
For funds targeting IRRs in the teens, opportunities in the OECD may be enough to satisfy their appetite, but for investors targeting returns in excess of that, the Indian
infrastructure opportunity warrants close inspection. The massive build out provides some excellent greenfield opportunities to capture excess returns, with both 3i and
Warburg Pincus, established players in the Indian private equity market, picking up stakes in the ports sector inover the last year.
While due diligence may be complex, operating environments not completely predictable and bureaucratic hurdles for investors difficult to navigate, cherry picking the right
investments in the infrastructure and related sector over the next couple of years, many believe, will lead to excellent results over the next five to seven years and more.
A compelling comparison
An interesting debate is the one around public acceptance towards private investment in infrastructure. Lazard’s recent survey highlights the growing acceptance of private
investment in infrastructure in the US. However, the events of the past year - including the Chicago's Inspector General’s Office’s report a few days back on the privatization of
the Chicago Meters leave no doubt about the fact that there are pockets of growing public resentment, especially in the US, against the use of PPPs.
What most people will realize soon is that given the investment needs of India, contrary to resentment, there is in fact, an eager anticipation for private funds and structures
such as PPPs. This view is mirrored in the attitude of the masses on the ground – the end users of these assets - who are willing to pay that extra sum to enjoy never before
seen world class infrastructure. This leaves the administrations with little choice but to make conditions surrounding private investment in infrastructure a viable and profitable
activity.
Establishing a PPP is now considered to be the default option for major infrastructure projects in sectors such as roads, railways, airports, ports and other transport
segments.