Increased capital spending by government on infrastructure and asset-building projects is set to increase
Ukraine war, global slowdown, COVID, high inflation and interest rates are the highlight of year 2022. All of these indicate shrinking GDP. Even under given scenario, World Bank had an upward revision of Indian GDP projections, i.e., from 6.5% to 6.9%. India became the fifth largest economy replacing UK in 2022, thanks to Government focus on infrastructure and initiatives like Atmanirbhar Bharat, Mission Karmayogi, Pradhan Mantari SVA Nidhi Scheme, etc. Some of the major projects completed in 2022 were Chenab bridge, Bundelkhand Expressway, Trans-Haryana Expressway, Ahmedabad and Nagpur Metro Phase 1, Asia's biggest hospital, etc and some major projects namely Delhi-Mumbai Expressway, bullet train project etc are under construction.
- SANDEEP GARG
Managing Director & CEO, Welspun Enterprises
How has been the year 2022 and how do you look at the year 2023?
Ukraine war, global slowdown, COVID, high inflation and interest rates are the highlight of year 2022. All of these indicate shrinking GDP. Even under given scenario, World Bank had an upward revision of Indian GDP projections, i.e., from 6.5% to 6.9%. India became the fifth largest economy replacing UK in 2022, thanks to Government focus on infrastructure and initiatives like Atmanirbhar Bharat, Mission Karmayogi, Pradhan Mantari SVA Nidhi Scheme, etc. Some of the major projects completed in 2022 were Chenab bridge, Bundelkhand Expressway, Trans-Haryana Expressway, Ahmedabad and Nagpur Metro Phase 1, Asia's biggest hospital, etc and some major projects namely Delhi-Mumbai Expressway, bullet train project etc are under construction.
A new World Bank report estimates that India will need to invest $840 billion over the next 15 years—or an average of $55 billion per annum—into urban infrastructure. The year 2023 will be the last year before India enters another national election cycle. Typically, prior to election year a lot of new initiatives and projects are announced. We expect announcement of many infrastructure projects which have direct impact/connect with masses. This should be good in general for Indian infrastructure industry.
What could be the key challenges and what will drive the growth?
India is no different from rest of the world and is experiencing challenges due to Ukraine war, high inflation and interest rates, COVID etc. Over and above, budgetary constraints of the government, limited private financing for infrastructure, non-availability of long-term financing instruments for infrastructure projects, L1 bid awarding criteria, land acquisition and limitation of skilled manpower etc are key internal challenges.
India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. Rising employment, increasing consumption, supported by rising consumer sentiment, will support GDP growth in the coming months. Increased capital spending by government on infrastructure and asset-building projects is set to increase which will have multiplier effect on the growth.
How are you gearing up for the year ahead?
We have been able to prove the entire value chain of our asset light business model, i.e., winning-executing-stabilizing-monetising the projects. With the recent exit from the completed highway project portfolio, we have the liquidity and balance sheet strength to embark for the next phase of growth, i.e., working on same business model although may be on a much larger scale.
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