"Infrastructure sector needs economic boost" -Governance Now

"Infrastructure sector needs economic boost"

SREI chairman says private infrastructure companies facing problem because domestic funds are locked and funds from foreign markets are not coming

GN Bureau | March 8, 2013

In a bid to revive the infrastructure sector and bring it back on the growth track, SREI chairman and managing director Hemant Kanoria urged the need for infusion of fresh capital and clear thinking-through of policies.

Addressing media persons on Thursday, Kanoria pointed that the future of the cash-strapped sector seemed bleak if immediate measures are not taken. “Currently, private infrastructure companies are facing a problem because domestic funds are locked and funds from foreign markets are not coming. Public private partnerships in this sector will continue to experience a slowdown for some time and hence, an equity infusion of at least USD 8-10 billion is an urgent need,” he said.

In the recent times, numerous infrastructure development projects have been stalled on account of a variety of reasons ranging from clearance hurdles to private companies pulling out of projects and which has plagued the Indian economy.

Attributing these problems to the lack of coordination between various ministries, the company’s vice-chairman Sunil Kanoria, said, “There needs to be clear thinking-through of policies in the decision-making process. We need to take a call now as to how much of our land and environment are we willing to sacrifice to bring about infrastructural development.”

He added, “The government needs to take a clear stand on whether the economic environment in the country will be market-linked (profit-centred) or control-linked (welfare-centred). Hence, if the government has decided to control the prices that the consumers need to pay, it also needs to keep a check on the profits that can be enjoyed by companies.

“The cart needs to be put before the horse and so once the prices that the consumer pays is decided, then one can calculate backwards and control the costs and profits of the firms involved. Control has to be exercised from the source right to the end.”

The company, which registered a consolidated growth of 140% in its profit after tax during the quarter ending December 2012, plans to apply for a banking licence. “The deadline given by the RBI is till June this year and we will definitely apply because we are operating over 26, 000 common service centres (CSCs) in the economically weaker states including Bengal and Bihar which are already working as business correspondents. This will help us provide better services,” the chairman said.

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