The world economy is still struggling with continued weakened growth and the scenario is no different in India. The Government has, through the Union Budget 2013-14, given encouraging signs to the economy.

The Budget is a realistic one. Given the economic and political circumstances, the Finance Minister has presented a pragmatic budget with positive objectives for long-term growth. It is balanced and outlines specific measures to bring back the economy on higher growth trajectory.

The Budget aims at equitable and sustainable growth which will act as a catalyst of growth in key sectors. Lowering of the fiscal deficit is perhaps its most important aspect. The Finance Minister has attempted to keep the deficit within acceptable limits while maintaining growth focus. We are confident there will be several other measures that the Government will announce to ensure that the economy is back on track.

INFRASTRUCTURE FUNDS

While infrastructure development is one of the top priorities of the nation, the pace of growth in infrastructure has not been commensurate to demand and continues to pose a major bottleneck and challenge for the country.

Since India suffers from severe infrastructure deficit, any steps taken towards improving infrastructure are welcome. Budget 2013-14 has turned out well overall for the infrastructure industry. The 12th Plan projects an investment of $1 trillion in infrastructure and envisages that the private sector will share 47 per cent of this.

Additionally, Infrastructure Debt Funds (IDF) will be encouraged. These funds will raise resources and, through take-out finance, credit enhancement and other innovative means, provide long-term low-cost debt for infrastructure projects.

The Government’s plans to establish two new major ports in West Bengal and Andhra Pradesh, which will add 100 million tonnes of capacity, will give a major impetus to the overall growth.

It is very encouraging to know that the Government has plans to devise a PPP policy framework, with Coal India Limited as one of the partners, in order to increase the production of coal for supply to power producers like us. This will help in fuelling the raw material-deprived power sector.

Another significant move by the Government has been towards creating a better road network with plans to award 3,000 km of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh in the first six months of 2013-14. It will be good to know how the Government intends to route the development – EPC or BOT.

Significant support for social and development sectors is in line with the Government’s ongoing efforts of making growth inclusive. We are hopeful that the Government will take stronger and sustained steps beyond the Budget to address the core issues faced by Indian industry.

The Government must take measures to address the issue of land acquisition, R&R, time-bound project approvals, environmental clearances and financing. These issues are restricting the growth of the economy.

PROJECT ROADBLOCKS

We do expect that the Government will continue to encourage private sector investment in core areas by creating a conducive environment. Policy initiatives have been positive and we look forward to substantial progress on the implementation front so that there can be increased investments and companies can make financial closures on time.

Overall, the announcements are positive; implementation will be the key.

(The author is Vice-Chairman, GVK Group.)

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