27Feb

Union Budget 2015-16 Economic Survey: Modify PPP model, highway projects must shift to e-tolling

The rate of stalling of projects has reduced over the last three quarters, said the Economic Survey. Stall projects accounted for 7 percent of GDP in the December quarter, compared with  8.3 percent during the same period last year.

The key now was to revive public investment to grow infrastructure, the Survey said. It said, the revival of interest by private players and banks in public private partnership (PPP) would require a review of contracts. It said the risk in PPP model should be transferred to those who can manage it.

The Survey said PPP Financing structure should attract pension and insurance funds, adding that high projects should shift to e-toll systems and escrow accounts. The Survey also said efforts were needed to reform direct tax system.

27Feb

Union Budget 2015-16 Economic Survey: Cheap oil will lift growth, but challenge is to create jobs

Economic Survey_3

In the short run, growth will receive a boost from lower oil prices, from likely monetary policy easing facilitated by lower inflation and lower inflationary expectations, and forecasts of a normal monsoon, the Economic Survey 2014-15 said. The Survey estimates GDP growth at market prices for FY16 at 8.1-8.5 percent, 0.6-1.1 percentage points higher vis-a-vis 2014-15.

Four factors that could drive this growth according to the Survey:

*The government has undertaken a number of reforms and is planning several more

* A further impetus to growth will be provided by declining oil prices and increasing monetary easing facilitated by ongoing moderation in inflation.Simulating the effects of tax cuts, declining oil prices will add spending power to households, thereby boosting consumption and growth.

* Further declines in inflation and the resulting monetary easing will provide policy support for growth both by encouraging household spending in interest-sensitive sectors and reducing the debt burden of firms, strengthening their balance sheets.

* The final favourable impulse will be the monsoon which is forecast to be normal compared to last year

Still the challenge will to create enough jobs in the economy so that the fruits of this growth are shared by everybody. “There has probably been a decline in long run employment growth in the 2000s relative to the 1990s and probably also a decline in the employment elasticity of growth: that is, a given amount of growth leads to fewer jobs created than in the past,” the Survey said. “Given the fact that labour force growth (roughly 2.2-2.3 percent) exceeds employment growth (roughly about 1.5 percent), the challenge of creating opportunities will remain significant,” the Survey said.

27Feb

Union Budget 2015-16 India Update : It is about development, not names of schemes Says PM Modi

Modi 1

In his reply on motion of thanks to President Pranab Mukherjee’s address to the joint session of the Parliament, Prime Minister Narendra Modi said the debates that ensued were very good. Many MPs expressed their thoughts and several of them sent their views in writing, said Modi.

For sometime now, the Opposition has been saying that the NDA government has been simply renaming old schemes and policies started by them. Modi replied by saying that the issue is not about names of the schemes, it is about development. “I am simply trying to find solutions to problems that have been existing for many years now,” he said. He says his government inherited a legacy of problems.

On Swachh Bharat Abhiyan, he said, cleanliness is key and there is a need to address the root problem. “You talk of Nirmal bharat, and that we have brought in ‘Swacch Bharat’. Name is not the issue, the problem is the issue. Swacchta is an issue and it is about the mindset. In my mind are poor people,” he said.

Raising the pitch further, he said cleanliness is also related to respect and dignity of women. According to him, many female students drop out of schools due to lack of toilets. Taking a dig at Congress, Modi said he will never shut down MNREGA as it showcases the failure of the prior government. He jokingly said no one can question his political wisdom and his instinct says ‘do not end MNREGA’. However, he added that his government will add value to it to benefit poor people further.

On his fight against corruption, he urged everyone to join hands and ensure there is no corruption in the future. “I believe corruption free services can be developed, everyone needs to work together to fight corruption.” On the controversial Land Acquisition Ordinance, Modi assured the Parliament that it is not anti-farmer.

Claiming that his government’s biggest achievement was it managed to get the country talking on black money, Modi said despite the Supreme Court’s directives, a special investigating team (SIT) was not formed by the previous government.

Modi assured everyone that his government was not playing vindictive politics.

27Feb

Union Budget 2015-16 India Expectation : See Rs 2-2.5K cr more defence proj orders in 2-yrs

Budget 3

 

With the current government’s focus on defence programme, the ministry has awarded battlefield management system (BMS) development contracts worth Rs 50,000 crore to two consortiums. One comprises of BEL and Rolta India and the ot her consortium includes the Tata Power SED and Larsen and Toubro Defence.

According to KK Singh, CMD of Rolta India, the government is moving really fast and for finalising the specifications the first meeting has been called on March 4, he said. After which the company will prepare a detailed report within a couple of months and post that prototype will be done, he added.

Singh said the company is already ready with the products, so the prototypes for them would take less than a year and post that the testing by government will be done in another year. Singh is hopeful that in two years from now the company would be able to deploy the system, post which the company is hopeful of getting Rs 2000-2500 crore incremental orders. Currently, 20% of revenues of the company come in from defence In the Rolta-BEL consortium, the company is responsible for the complete battlefield management software, which constitutes the major portion of the project, said Singh.

This prototype has to be developed now. The government now is moving very fast. One thing I would like to say is that there is a difference which we are seeing in this government and the previous government, for example in previous government there was first ‘Make India’ project which was awarded, which was called Tactical Communication Systems. It has been over two-and-a-half years and nothing has moved there whereas in this, this thing has been notified this yesterday and the first meeting has been called on 4th for finalisation of specifications.

As soon as the specifications are finalised, the first thing is to do a detailed project report which will specify all the specifications. Once the specifications and detailed project report is ready, which should be in next couple of months then thereafter the prototype will be done.

The beauty is the prototype will depend upon the Development Agencies (DAs) as to how much time they take. There are two Development Agencies – (1) our consortium, which is BEL and Rolta and (2) is Larsen and Toubro (L&T) and Tata Power. However, now both consortiums will be asked how much time we will take.

We are ready with the products, so we are not going to start developing it. So, our answer would be that it will be minimal type, so we will not require more than six-eight-nine months to be able to give the prototype. The other agency may require much more time and if they require much more time, I do not know whether the government will allow that. So that will depend on the government.

It is not one of the two, so it is going to be both and that is but for sure. There is no exact guideline as to how much percentage somebody will share but what has been talked, indicated is that it will depend on L1 and technical that who is better priced and who is better technically suited and based on that the major share, more than 70 percent share will go to that party and the remaining share will go to other party and other party will be told that you should meet the specifications and you should meet the price. However, unfortunately if the other party is not able to meet the specifications, is not able to continue then government cannot help it then only one party will remain.

As far as I am concerned I can talk about Rolta. In our consortium we are fully responsible for complete software. The whole battlefield management software, which is a major portion of this project because this is an IT project and 14 companies were shortlisted to call for that and most of them were IT companies including Wipro, Infosys, Tata Consultancy Services (TCS). Therefore, this being very software oriented project. We have been working over this for last six-seven years and we have invested few Rs 100 crore as our investment for creating this software. Similarly BEL, which is our partner for this, has been working very cautiously for tactical communications system, so they have been able to produce good software defend radios, which are required.

I would say as far as prototype etc is concerned, I believe that it should not take more than a year for it to be ready and once it is ready then it is a question of testing. The testing also will be done by the Ministry of Defence (MoD) in various terrains, fields, from mountain and sand everywhere, so it should be another one year process. I believe that two years from now we should be in a position to deploy the system and orders should start kicking in.

© 2008-17. All Rights Reserved. Epic Research Pvt. Ltd.