India’s Infrastructure Sector Calls for Policy Reforms to Boost Growth and Sustainability
The companies in the infrastructure sector in India are demanding for reforms in areas such as tax relief for clean technologies, expansion in fund spending on infrastructures such as ports, roads, and railways, reforms in GST regulations, and encouraging skill development projects in order to enhance skills of employees in the construction and infrastructure sector. It also aims for promoting public-private partnerships in infrastructure projects.
Expectations of participants in infrastructure sector
The various market participants in the infrastructure sector from segments such as real estate, urban development, construction, and transportation strongly believe that the government of India needs to make changes in its fiscal and other policies in order to reduce pressure on infrastructural plans.
Managing Director of Interach Building Products, Arvind Nanda emphasized on the need for reduction in tax rates, especially for various projects using pre-engineered buildings (PEBs). Further he states that to reduce the cost incurred on projects, the government should increase input tax credit (ITC) benefits for PEBs. It will also help in adoption of environment friendly methods like PEBs and in turn will lead to development in the sector. He states that the government of India must increase investment in skill development schemes under its mission of Skill India to enhance the efficient workforce in the country’s construction sector.
These various reforms such as promotion of green energy, skill development and tax relief will encourage participation of the private sector. It will also help India to achieve its target of sustainability as promotion of green energy will encourage investment and private companies to adopt this technology.
The efficient and fair use of capex in the infrastructure sector in different states of India will help to encourage stable growth in the country. Partner at Grant Thornton Bharat, Vivek Iyer states that the government of India can distribute its funds according to the specific needs of the particular states. It will ensure implementation of financial regulations and policies in line with promoting long-term development in the infrastructure sector of India.
The capex scheme for states with an interest free loan for the duration of 50 years will help to encourage stable growth in different states in the country and in turn will lead to progress of India.
Partner at JSA Advocates and Solicitors, Ashish Suman expects expansion of capital financing in infrastructure such as ports, roads, and highways for development of the transportation sector in India. In order to encourage investment by the private sector and to develop infrastructure in India, there must be expansion in capital spending on the road segment to about 10 percent and also promote undertaking of Build-Operate-Transfer (BOT) projects.
To encourage investment in small cities (Tier 2 and 3), it is important to strengthen public-private partnerships (PPPs) projects. Suman further states that investment challenges in PPP are observed in the development of urban infrastructure. To address these issues, the government can focus on efficient use of the fund provided by the Urban Infrastructure Development Fund. It should focus on building a strong municipal bonds market which will help in resolving the issues of urban local governments who require money for financing in infrastructure projects.
Leader for India & Subcon at LWT IMEA, Priya Rustogi stated that India is anticipated to record a growth in GDP by 6.5 percent. Along with urbanisation, India can emphasize on building affordable housing and development of infrastructure of the country. This will result in expansion in demand for new, eco-friendly and good-quality bathroom related goods. She further added that the government of India should do reforms in GST implemented on sanitaryware. It should also focus on encouraging eco-friendly construction methods in order to achieve milestones of conserving the environment.
In case of progress in decorative and industrial paints, the Director of Shalimar Paints, Kuldip Raina stated that reforms in regulations are needed to have efficient supply of raw materials, incentives for advancement in technologies and tax relief to boost Research and Development in the sector. It will help in lowering energy and production costs, and also encourage more players to come in the industry.
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