India Insight

L&T Infra Finance CEO upbeat on India’s economic recovery by 2015

India’s economy recorded its slowest growth in a decade in the fiscal year ending in March but the CEO of L&T Infrastructure Finance, that provides loans to companies such as Jaypee Group to develop roads and other infrastructure, is hopeful of an economic turnaround in less than two years that will boost business prospects.

The company, part of India’s largest engineering and construction conglomerate Larsen & Toubro, will likely end up dealing with a slowdown in business growth in the current financial year, but might bounce right back next year if the winner of India’s federal elections due in 2014 starts spending on infrastructure projects.

Reuters spoke to Chief Executive Officer Suneet Maheshwari about his outlook for the industry and the Indian economy. Here are excerpts from the interview:

Q: What is your outlook for the industry?

A: It is difficult to imagine for any individual that we will always be doing good. Sometimes you will have a viral attack. Business is also like that. To believe that this will pass off in one year for the world and for India will be extreme short-sightedness and lack of understanding of what the real world is … I know it is dismal, but which country in the world is showing 5.3.-5.4 percent growth? This year I believe, with whatever Chidambaram is doing, we will hit 6 percent growth.
I personally feel that this view about India by ratings agencies – to put it on a pathway to downgrade or a watch towards a negative outlook – that is being too severe on India. And those who are doing it have probably not understood India very well.

Q: Do you feel the upcoming general elections could delay plans or government spending?

Tata Power scouts for opportunities abroad

(Any opinions expressed here are those of the author and not necessarily of Reuters)

Tata Power Company Ltd, part of the salt-to-steel Tata conglomerate, is India’s largest integrated power producer. It aims to generate some 20,000 MW by 2020, up from more than 8500 MW now, and is scouting for opportunities abroad as well as building its thermal and renewables business at home.

Like its peers in the industry, the company has faced problems of land acquisition and fuel supply shortages in developing new projects, projects that are seen as key to help revive India’s flagging economy and fix blackouts.

Counting the cost of India’s blackouts

(Any opinions expressed here are those of the author and not necessarily of Reuters)

Is it better to pay more money for more electricity, or keep prices low and look forward to blackouts that will conk out offices, factories and homes in India? That is the question that lies at the heart of an ongoing debate about whether authorities should allow utilities Adani Power Ltd and Tata Power Co Ltd to raise their tariffs on existing contracts to clients, to compensate the companies for the domestic coal supply shortages and the rising cost of buying coal from overseas.

Much of it a relic from before the 1991 economic reforms that kick-started the India growth story, the country’s infrastructure is screaming out for more investment to fix pot-holed roads, modernise the railway network and build more power plants. But unable to match the spending power that the likes of China have, the Indian government has turned to the private sector to fund much of the new infrastructure it needs. Indian politicians must therefore strike a balance between allowing the private sector to make money, while at the same time protecting the interests of customers (and voters) in a country where hundreds of millions live below the poverty line.

Thirsty Bangalore: all tanked up and nowhere to go

(photo gallery)

If you live in one of India’s big cities, you share the road with water tankers. They thunder down the streets, delivering water to houses and apartment complexes, often spilling through some invisible leak. Tucked away on side streets, locals throng them with buckets. Tankers are part of an economic ecosystem that are inseparable from a country whose cities teem with millions of people, but whose public utility companies often don’t have enough water to go around.

Bangalore, India’s “BPO” and information technology capital, is full of them because of the city’s population growth in the past 25 years 1.5 million people in 1971, 9.5 million in 2011, according to census data.

The ‘Pensioner’s Paradise’ cannot satisfy the demand for water. Nor can it always handle routine problems and maintenance. A recent decision by the Bangalore Water Supply and Sewerage Board (BWSSB) to do some major work on the pumps at the Cauvery river, which delivers much of the water supply from nearly 100 kilometres away, shut down service to large parts of the city for two days.

Navigating the obstacle course of India’s SimCities

The Indian government is belatedly waking up to the fact it needs to build new cities and industrial hubs in order to sustain the growth that is supposed to propel the country to super economy status in the 21st century.

But it might be a case of too much, too late as India sets out to build 24 new, industrial cities along a planned dedicated freight corridor from the political capital, New Delhi, to the financial capital, Mumbai priced at a cool $90 billion. Costs aside, it’s a big ask in a country known for its mulish bureaucracy and maddening red-tape, its violent protests over land, and endemic corruption. Even building a bridge (like the Mumbai Sea Link) or highways (like the Golden Quadrilateral) in India can be a struggle.

Dholera, Gujarat: spot of a future Indian city

But a handful of Indian civil servants tasked with making the SimCity dream a reality seem determined to chart a path through the obstacle course of Indian development projects.

Amitabh Kant: India’s ‘can-do’ man

Amitabh Kant is a man thinking big things about India’s future.

Working from his New Delhi office, tucked away on the third floor of a government-run luxury hotel, he heads what may be the country’s most ambitious ever infrastructure project: building 24 cities from scratch along a 1483-km railway line.

“The vision is to create a manufacturing and trading hub with world class infrastructure,” he told Reuters.

Such an exercise is fiendishly difficult in a country as famous for its bureaucratic red tape, corruption and bloody land acquisition battles as it is for its stellar economic performance over the past decade.

Indian women hard-pressed to relieve themselves

For an Indian man, the entire country is one easy-access urinal. Be it mustard fields, the national highway or the Himalayan foothills — unzipping, unleashing and relieving comes naturally to them. Indian women, unfortunately, do not enjoy the same privilege. For them, infinite patience is a survival skill and a big bladder a necessity.

Bollywood actor Shah Rukh Khan seems to empathise with the pain of the Indian woman. He wants to “dedicate” his life to building public utilities for women across India. “I want dignity and respect to be brought to women,” he said at an event in Mumbai.

It is a shame that the government has still not woken up to this disparity in India’s infrastructure. Be it urban areas or villages, clean public toilets for women remain an alien concept in India.

Lavasa: City of shared sensibilities?

It was with a heavy dose of cynicism I went to see Lavasa, one of India’s few attempts at building a brand new city, which has ambitions of being an IT and learning hub, as well as a tourist destination.

For a while, media outlets gushed with praise that bore a suspicious resemblance to Lavasa’s own marketing material. Then came stories which questioned Lavasa’s land acquisition and ecological proclamations. So when I drove through the hills outside of Mumbai to check out the place myself, as the quoted travel time of three hours turned to five, I was girded for disappointment.

Yet, I confess, I liked Lavasa.

Not because its lake was beautiful (it was an uninviting shade of orangey-brown), or its hotels were charming (common corporate fare) or because its views were breathtaking (they were nice, but only one trail exists from which to see them) but I liked Lavasa because of its work-in-progress ambition to get all that right and offer affluent, but not filthy rich, India something very fine: modern amenities and working infrastructure, brightly-coloured buildings of style and flare, attempts at being eco-friendly and above all, the one thing that is missing in too many dog-eat-dog/developer-eat-developer urban areas of India — planning.

Survey says doing business in India is tough

A big banner of of U.S. President Barack Obama is pictured on a building in Mumbai November 6, 2010. REUTERS/Fayaz Kabli

Even as India Inc celebrates U.S. President Barack Obama’s recognition of the country as a world super power, a recent study by the World Bank presents a contrasting view.

India ranks 134 among 183 nations in a survey called “Doing Business 2011″  — that gauges the ease of doing business in a country — and is ranked behind countries like arch rival Pakistan, Bangladesh and Sri Lanka.

Singapore leads the pack, while Hong Kong grabs the second position in the list.

from Summit Notebook:

Infrastructure still top-of-mind in India

INDIA/
On Monday, we kick-off the 2010 India Investment Summit. We'll have exclusive interviews in Mumbai and Bangalore. In 2006 we held the first Reuters India Investment Summit. It was my first time in India. I've had the privilege to return every year. How time flies. Here we are four years later. Some of the key players may have changed but the big, over-arching theme is still the same: Infrastructure. It's the key to realizing the country's potential but bureaucracy, tough financing and hesitant overseas investment have slowed development in the sector, calling into question the future of India as a powerhouse.

India has had only mixed success in its efforts to accelerate construction of roads, bridges and power plants. The statistics are mind-blowing...the country is growing at 8.5% and has a population of 1.2 billion that is making a mad-dash from the countryside to sprawling cities. Call them growing pains...in India's expanding cities there is an acute need to speed project approvals, implement new financing models and attract overseas investment for much needed infrastructure. But, while the business opportunity is tremendous investors looking to India as a way to play the emerging markets are wary given the history of missed deadlines and red tape that makes getting projects completed a challenge.

Is red tape getting better or worse? Which sectors are attracting most interest? How do returns compare with similar projects globally? How do sector companies attract foreign investment in large projects? Are the challenges forcing investors and developers to look overseas instead?

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