Budget By The Government Is Likely To Step Up The Expenditure - Feb 16, 2009

The interim budget by the UPA government is likely to step up the expenditure on its flagship programmes along with rural development and housing that doubling the fiscal deficit to 5% in 2009-10. The interim budget is to be presented by External Affairs Minister Pranab Mukherjee who is currently holding the charge of Finance Ministry. The government in the last Budget has fixed the fiscal deficit for the current fiscal at 2.5 per cent of GDP, which is likely to be raised to 5 per cent for the next fiscal, primarily on the back of higher allocations towards the government''s flagship schemes like the Bharat Nirman and the National Rural Employment Guarantee Scheme.

The government to provide focus on the urban infrastructure may expand the ambit of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to include more districts. Besides this, the other focus of the Budget is likely to be on rural development which may witness some more allocations. The interim Budget may also provide a token allocation for kick starting the Unique Identification (UID) scheme to provide a specific number to every citizen.

In line with this, the infrastructure finance company IIFCL may be authorized to raise money through tax-free bonds. With the last two-stimulus package announced by the government due to slowdown, the fiscal deficit has already crossed four per cent till December. The total gross budgetary support (GBS), which represents the expenditure towards Plan schemes and transfer of resources to states, may be increased.

Infrastructure Growth Declines To 3.5PC - July 10, 2008

Poor growth rate in electricity generation joined with petroleum refinery products production becoming almost stagnant, the overall index for six infrastructure industries grew by 3.5 per cent in May 2008 as against 7.8 per cent in May last year. Electricity sector, which takes 10.17 per cent weight in the Index for Industrial Production (IIP), highest among the six core sector industries which together take a weight of 26.68 per cent in the IIP, has recorded a growth of 2 per cent in May this year as against 9.3 per cent in the same month last year. The growth in petroleum refinery production became almost stagnant with a 0.1 per cent output growth as compared with 14.9 per cent in May last year.

The growth rate in the cement sector also declined during the month to 3.8 per cent from 9.9 per cent in the same month last year, while finished steel production grew by 5.2 per cent as against 8.4 per cent in May last year. For the first two months of the current fiscal April and May the overall growth of the core sector index stood at 3.5 per cent as against 6.9 per cent in May last year.

Infrastructure Industries Growth Declines To 4.2pc In Jan

New Delhi: On the heels of the slowing in industrial production in January 2008, the six core infrastructure industries grew by 4.2 per cent in that month, almost half the 8.3 per cent growth seen in such industries in the same month last year. The cumulative growth rate in these sectors during April-January 2008 fell to 5.5 per cent as against 8.9 per cent in the same period last fiscal. Crude oil production registered a negative growth of 0.2 per cent in January 2008 as compared to 4.7 per cent growth in same month last year. Electricity sector saw 3.3 per cent growth in January 2008 as against 8.3 per cent growth in same month last year.

The six core infrastructure industries are crude petroleum, petroleum refinery products, coal, electricity, cement and finished carbon steel. They cumulatively account for 26.7 per cent of the weightage in overall index of industrial production (IIP). The performance of the six core infrastructure industries in January 2008 does not come as a surprise. In January, overall industrial growth had declined to 5.3 per cent as compared to 11.6 per cent in the same month in the previous year.

India Calls Turkish Cos To Infuse In Infrastructure

New Delhi: India on March 18, called the Turkish companies to explore the Indian markets and make investments, especially in the infrastructure sector.At the bilateral meeting with the visiting Turkish State Minister for Foreign Trade, Mr Kursad Tuzmen, the Union Commerce and Industry Minister, Mr Kamal Nath, said that Indian companies were also dedicated to make investments in Turkey. The meeting was attended by Mr Ajay Shanker, Secretary (Industrial Policy & Promotion); Mr G.K. Pillai, Commerce Secretary, senior officials from the Ministry of Commerce and Industry, and representatives from the industry. Indian investments in Turkey are in diverse sectors viz., railway construction, electricity transmission, pipelines, consultancy services for earthquake emergency, hydro-carbon, CNG conversion and IT services.

Growth Of Infrastructure Sector Falls To 4-Pc In December

New Delhi: The growth of the six key infrastructure sectors in December 2007 slipped to 4 per cent compared to nine per cent achieved a year ago. The April-December performance of infrastructure industries - crude oil, petroleum refinery products, coal, electricity, cement and steel - also fell to 5.7 per cent as against 8.9 per cent in the same period last year. Crude oil was the worst performer with a negative growth of 1.5 per cent in December as against a positive growth of 10.7 per cent in December 2006.

Petroleum refinery products registered a growth of just two per cent in December 2007 as compared with 10.8 per cent in the same period in 2006. Finished steel grew by 5.13 per cent as against 10.2 per cent, while expansion in the cement sector dropped to 3.9 per cent from eight per cent. Electricity generation on the other hand went up by only 3.8 per cent as compared to 9.1 per cent. Coal production, on the other hand, registered a growth of 8.4 per cent as against a growth rate of 2.9 per cent in December 2006.

Infrastructure Firms Want Policy Changes

The infrastructure sector is booming but that has not made the industry''s budget wishlist any shorter and topping that list are better lending and refinancing policies. The Indian infrastructure boom is here to stay irrespective of the slowdown in major global economies and the construction giants including L&T, HCC, Gammon and IVRCL want to see this Union Budget come in as a booster primarily seeking policy changes that will solve their problem of dual dividend taxation at SPV company and holding company level, reduction in rate of capital gain tax for unlisted SPVs, better lending and refinancing policies and easing of ECB norms. Opportunities for the construction industry are also being created by industrial capacity expansion such as steel, cement, oil & gas, power and petrochemicals besides growth in housing demand and at a time when the construction and infrastructure companies are growing at over 30 per cent per annum and with projects worth $350-450 billion planned during XIth five year plan spanning 2007-12, the government will clearly will not be a in position to ignore the industry.