BREASTING AHEAD

[vc_row][vc_column][vc_column_text]The ambitious target of a five trillion economy can be met provided it could achieve 8% GDP growth every year for the next six years.

The size of India's economy was just about USD 270 billion in 1991, when the country initiated the process of globalization. But today, India is a USD 2.7 trillion economy. It took two decades for the country to add two trillion US dollars to the economy. And the ambitious target of five trillion can be met provided it could achieve 8% GDP growth every year for the next six years.  

The development of roads and highways, railways, and port infrastructure has to be speeded up for India to move up in the supply chain index. Increasing the speed of freight movement is very important for a robust economic growth and this can be achieved only by adding capacity in the transport infrastructure; and the construction industry has a direct role to play in developing the transport infrastructure.[/vc_column_text][vc_column_text]Delivering his inaugural address at CII's Excon 2019, Nitin Jairam Gadkari, Minister for Road Transport & Highways, and Micro, Small and Medium Enterprises, Government of India said that the Prime Minister's vision is to make India a USD 5 trillion economy. To achieve this goal, the government is embarking on major infrastructure and industrial projects worth Rs 100 lakh crores. “For the road sector alone, the Centre is investing Rs 2 lakh crores this year. The amount of investment for the next year will increase to Rs 3 lakh crores. Within the next five years, the total government spend on the road infrastructure will be about Rs 17 lakh crores,” he said.  

The Minister urged the part the private players in the construction industry to focus on mechanization, adoption of advanced technologies and global best practices, usage of LNG and bio-fuels, and innovations in using waste materials as raw materials for their construction projects in order to reduce the cost of construction, and pollution.[/vc_column_text][vc_column_text]According to Vikram S Kirloskar, President, CII, in his address, the cost of doing business in India is set to come down as the government is keen on rebooting the infrastructure in roads, ports, railways, waterways by fast-tracking infrastructure projects. The construction equipment industry can face the tough market situation prevailing now by focusing on being ready for Industry 4.0 and reinventing itself.  Azim Premji, Founder, Chairman Wipro Limited, said that a well-planned, modern infrastructure is extremely important for India to achieve its USD 5 trillion target. Currently India spends about 5% of its GDP towards infrastructure development. It should increase it at least to 6%, which is what China spends for its infrastructure development.

 Explaining key Initiatives planned to accelerate growth of Infrastructure to regain market share,  S K Mishra, Executive Director (Infra), Ministry of Railways, said “The Government has already taken the decision of allowing 100% FDI in Railway Infrastructure as a significant policy shift to adopt global best practices of world railways and to attract massive investment from all over the world. There will be a substantial increase in the capital expenditure and Indian railways would be investing over Rs 10 lakh crore in the next 5 years on various projects. Projects include doubling or multiple tracks to decongest saturated network of which 14,000 km work is in progress and targeted to be completed by March 2024. 100% electrification of Broad Gauge track by December 2021. By March 2023, we will be completing the upgradation of speed to 130 kmph on 18,000 km of busy routes.”[/vc_column_text][vc_column_text]Explaining about major initiatives planed in Karnataka, R K Suryawanshi, RO- Projects, NHAI, said, “Road transport being vital to India's economy, the infrastructure contributes over 4.7% to the GDP. India's road network carries over 70% of its freight and 85% of passenger traffic making India the second largest country in the road and highway development industry after the US, and in terms of density we are at number 16 ahead of USA.  A good road connectivity ensures all round social and economic development of the region. In Karnataka over 17 projects amounting to Rs.18,000 crore covering a length of 1386 km are under implementation by NHAI. Another 5 projects amounting to Rs 6116 crore covering a length of 280 Km are awarded and the work is likely to be commenced soon during this financial year in the state of Karnataka.”[/vc_column_text][vc_column_text] According to a recent interview of ETNOW with Vinayak Chatterjee, Chairman, Feedback Infra the Calendar year 2020 is certainly expected to be better than 2019 because 2019 was a slow year for infrastructure. There was a meltdown of private investment. There was the period before the elections when code of conduct had to be observed. It disturbed the cycle by almost three months and then the government took three-four months to settle down after the general election. He says, “2019 was a very slow year for infrastructure, compounded by huge liquidity stresses and problems that all infrastructure players felt. So, that is the background. On the last day of 2019, it certainly looks better for the following reasons that we have a lot of anecdotal as well as statistical evidence that NHAI is bouncing back. A whole rush of projects is being readied once again and hopefully, liquidity is being released both on arbitrations as well as on pending bills, NHAI is set to rebound.”               

According to him the Prime Minister gave a clarion call for piped water and the Jal Shakti Ministry was formed. In this budget, both budgetary and off budgetary resources are going to be significantly upped for the water sector, including bulk transmission and retail distribution of water. That is a sector to look out for and finally there is any way a certain resurgence of capital works both in the railways and in the metro. When you add all these together, you see enhanced mood expectations for 2020. There is also likely to be significant action in the privatisation of electricity distribution. “There are also various models in the market place. The Government of India has announced that its favourite or its preferred model is the input based franchise model where public assets in a public utility need not be sold, but only the operational efficiency is maximised. A spate of orders on input based franchise model across the various discoms and states are expected. That will rev up the market for capital goods in the electricity sector as well as services. This is my broad outlook, reports ETNOW.              

Increased impetus to develop infrastructure in the country is attracting both domestic and international players. Private sector is emerging as a key player across various infrastructure segments, ranging from roads and communications to power and airports. India is expected to become the third largest construction market globally by 2022. India has a requirement of investment worth Rs 50 lakh crore (US$ 777.73 billion) in infrastructure by 2022 to have sustainable development in the country.     [/vc_column_text][vc_column_text]AVIATION

The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. India is currently considered the third largest domestic civil aviation market in the world. India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024. According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in India's air transport sector (including air freight) reached US$ 1,817.23 million between April 2000 and December 2018. The government has 100 per cent FDI under automatic route in scheduled air transport service, regional air transport service and domestic scheduled passenger airline. However, FDI over 49 per cent would require government approval. India's aviation industry is expected to witness Rs 35,000 crore (US$ 4.99 billion) investment in the next four years. The Indian government is planning to invest US$ 1.83 billion for development of airport infrastructure along with aviation navigation services by 2026.[/vc_column_text][vc_column_text]PORT

According to the Ministry of Shipping, around 95 per cent of India's trading by volume and 70 per cent by value is done through maritime transport. India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The Indian ports and shipping industry plays a vital role in sustaining growth in the country's trade and commerce. India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.               

Increasing investments and cargo traffic point towards a healthy outlook for the Indian ports sector. Providers of services such as operation and maintenance (O&M), pilotage and harbouring and marine assets such as barges and dredgers are benefiting from these investments. The capacity addition at ports is expected to grow at a CAGR of 5-6 per cent till 2022, thereby adding 275-325 MT of capacity.

Under the Sagarmala Programme, the government has envisioned a total of 189 projects for modernisation of ports involving an investment of Rs 1.42 trillion (US$ 22 billion) by the year 2035.          

Ministry of Shipping has set a target capacity of over 3,130 MMT by 2020, which would be driven by participation from the private sector. Non-major ports are expected to generate over 50 per cent of this capacity. India's cargo traffic handled by ports is expected to reach 1,695 million metric tonnes by 2021-22, according to a report of the National Transport Development Policy Committee. Within the ports sector, projects worth an investment of US$ 10 billion have been identified and will be awarded over the coming five years.[/vc_column_text][vc_column_text]POWER

Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.            

India's power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required. The Government of India has released its roadmap to achieve 175 GW capacity in renewable energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. The Union Government of India is preparing a ‘rent a roof' policy for supporting its target of generating 40 gigawatts (GW) of power through solar rooftop projects by 2022. Coal-based power generation capacity in India, which currently stands at 191.09 (As of May 2019) GW is expected to reach 330-441 GW by 2040.[/vc_column_text][vc_column_text]RAILWAYS

The Indian Railways is among the world's largest rail networks. The Indian Railways route length network is spread over 115,000 km, with 12,617 passenger trains and 7,421 freight trains each day from 7,349 stations plying 23 million travellers and 3 million tonnes (MT) of freight daily. India's railway network is recognised as one of the largest railway systems in the world under single management.            

The railway network is also ideal for long-distance travel and movement of bulk commodities, apart from being an energy efficient and economic mode of conveyance and transport. Indian Railways was the preferred carrier of automobiles in the country with loading from automobiles traffic growing 16 per cent in 2017-18.    

The Government of India has focused on investing on railway infrastructure by making investor-friendly policies. It has moved quickly to enable Foreign Direct Investment (FDI) in railways to improve infrastructure for freight and high-speed trains. At present, several domestic and foreign companies are also looking to invest in Indian rail projects. The Indian Railway network is growing at a healthy rate. In the next five years, the Indian railway market will be the third largest, accounting for 10 per cent of the global market.               

This augurs well for the construction equipment market too. “The CE industry has seen tremendous investments in infrastructure in the last decade, with about half billion equipment installed, the industry has employed approximately 1.2 billion people. In the next five years, as India is aiming towards a five trillion economy, the expected investment in infrastructure would be 100 lakh crores and equipment requirement will be at least eight times of what it is today and it is expected to generate nine times of the employment.  To achieve this, the industry will definitely require help and support from the government. Internally, to accomplish that kind of growth, as an industry we will be focusing on three major things that include investing in R&D, Capacity Enhancement & Skill building. With the support of all the stakeholders, we are very confident that this industry is going to be an able partner to the Government of India to propel this nation from ‘Make in India' to ‘Building a new India,' stated  on the status of Indian CE Industry,  stated Dimitrov Krishnan, Vice President, ICEMA & Vice President-Sales & Marketing, Volvo Construction Equipment.[/vc_column_text][/vc_column][/vc_row]

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