A rewarding experience awaiting long-term investors in infra stocks
ET CONTRIBUTORS|
Updated: Nov 04, 2017, 03.52 PM IST
By DK Aggarwal
Infrastructure, which is a key driver of the Indian economy, has just got the much-needed push, as the government plans to build thousands of kilometres of roads and highways over the next 5 years under the Bharatmala programme.
Taking forward its promise to provide more efficient transportation, the government has taken steps to debottleneck the roads sector and appreciably stepped up the highway development and road building programme.
The sector has always received special attention and increased allocations in every budget since this government came to power in 2014. Over the past few years, besides allocating funds, the government has been working on providing the much-needed groundwork for the sector to take off. Actually, delayed progress in awarding of road projects due to litigations, restructuring of projects and liquidity crunch had slowed down this sector.
The announcement of Rs 6.92 lakh crore investment for building 83,677 km highways under the scheme will put 250 more districts on the four-lane highway map, linking a total of 550 districts, apart from easing traffic congestion in cities, connecting ports and economic corridors. The Bharatmala Pariyojana (BMP) would be rolled out by the government before the end of 2018.
As per the government, about 24,800 km are being considered under Phase I of Bharatmala besides 10,000 km of balance road works under NHDP, taking the total to 34,800 km, which will be built at an estimated cost of Rs 5,35,000 crore.
Also, the government’s decision to recapitalise PSU banks is likely to help jumpstart the credit cycle and facilitate private investments. Increased spending in infrastructure sector will have a multiplier effect on overall economic growth. The development of highways and inter-corridors will not only help them connect to the urban areas easily, but also facilitate improvement in education and businesses.
This project has the potential to create jobs and bring down logistics cost, impacting exports and investment. It seeks to draw both local and foreign private capital into the domestic infrastructure sector.
The government, through a series of initiatives, is working on policies to attract significant investor interest. Liberalisation of government regulations and a planned strategy to promote infrastructure spell opportunity for companies such as Ahluwalia Contracts, Ashoka Buildcon, Larsen and Toubro, Sadbhav Engineering and IRB Infrastructure, among others. Given the likely improvement expected in this space, long-term investors in this space should have a rewarding experience.
Infrastructure, which is a key driver of the Indian economy, has just got the much-needed push, as the government plans to build thousands of kilometres of roads and highways over the next 5 years under the Bharatmala programme.
Taking forward its promise to provide more efficient transportation, the government has taken steps to debottleneck the roads sector and appreciably stepped up the highway development and road building programme.
The sector has always received special attention and increased allocations in every budget since this government came to power in 2014. Over the past few years, besides allocating funds, the government has been working on providing the much-needed groundwork for the sector to take off. Actually, delayed progress in awarding of road projects due to litigations, restructuring of projects and liquidity crunch had slowed down this sector.
The announcement of Rs 6.92 lakh crore investment for building 83,677 km highways under the scheme will put 250 more districts on the four-lane highway map, linking a total of 550 districts, apart from easing traffic congestion in cities, connecting ports and economic corridors. The Bharatmala Pariyojana (BMP) would be rolled out by the government before the end of 2018.
As per the government, about 24,800 km are being considered under Phase I of Bharatmala besides 10,000 km of balance road works under NHDP, taking the total to 34,800 km, which will be built at an estimated cost of Rs 5,35,000 crore.
Also, the government’s decision to recapitalise PSU banks is likely to help jumpstart the credit cycle and facilitate private investments. Increased spending in infrastructure sector will have a multiplier effect on overall economic growth. The development of highways and inter-corridors will not only help them connect to the urban areas easily, but also facilitate improvement in education and businesses.
This project has the potential to create jobs and bring down logistics cost, impacting exports and investment. It seeks to draw both local and foreign private capital into the domestic infrastructure sector.
The government, through a series of initiatives, is working on policies to attract significant investor interest. Liberalisation of government regulations and a planned strategy to promote infrastructure spell opportunity for companies such as Ahluwalia Contracts, Ashoka Buildcon, Larsen and Toubro, Sadbhav Engineering and IRB Infrastructure, among others. Given the likely improvement expected in this space, long-term investors in this space should have a rewarding experience.
