‘Infrastructure will propel growth in 12 18 months’
Projects worth $25 b likely to be finalised soon: Report
May 26, 2014
Source : The Hindu

However, experts feel the recovery will take 12-18 months.

“We see infrastructure as an early cycle and we expect a potential $25-billion (about ?30,000 crore) in projects to be finalised in the next 12-18 months. Order pipeline for power (except for ultra mega power projects) and industrial projects is, however, weak,” a Barclays equity research report said.

Vishwas Udgirkar, Senior Director, Deloitte in India, said an impetus has to be given to key sectors such as the railways and ports that have been lagging behind as well as to roads and highways, where growth has significantly slowed down.

Common issues plaguing the sector such as land acquisition, environment clearance, need for innovative financing mechanisms and lack of FDI need to be addressed, he added.

Real estate

The growth trajectory of the sector had dipped during the UPA II. While the global economic slowdown did contribute to this, one could also say it was the inability of the Government to push major initiatives and projects that led to the decline.

Besides infrastructure, real estate is also widely recognised as a key sector for employment generation.

Maadhav Poddar, Associate Director-Real Estate practice, EY, said the economy as a whole and the real estate sector in particular should see good days ahead with political stability in sight.

Capital providers, both domestic and international, should now be comfortable making commitments, given that they can expect a clear agenda with a stable Government at the Centre.

The key demands of the sector are the introduction of real estate investment trusts and infrastructure investment trusts with related changes in tax and FDI regulations.

Granting of industry status to the real estate sector would make low-cost funding available.

Introduction of Goods and Services Tax and removal of ambiguity on the applicability of Value-Added Tax, besides restoring exemption on Dividend Distribution Tax and Minimum Alternate Tax to SEZs, are important, Poddar said.

Further, clarity on land acquisition and quicker / single window approval process is also required, he added.

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