Reliance Infrastructure's grand plans to expand massively seem to have forgotten a simple factor... Funding! Is this what was the nature of the beast? B&E's Ratan Lal Bhagat deeply questions the method in the madness
It would be foolhardy to imagine that the economic stimulus plans of a developing economy (India) and a developed economy (US) would have much in common, but then economic crises' can prove to be great levellers! One of US President Barack Obama's major bets on reviving the US economy is his proposed multi-billion dollar infrastructure plan (the largest since the 1950s, upward of $500 billion). India also recognises the criticality of fast-paced infrastructure development & has planned investments of about $410.61 billion ($1=Rs.48.76) in the 11th 5-year plan (again the largest since the 1950s, don't need to refer that!!!).
That's where the similarity ends, more or less. Obama's end game is that he has to generate millions of jobs from somewhere and has few options to do so. India needs to invest in infrastructure primarily because… errr… we need infrastructure… simple as that, and badly so! The infrastructural support systems like routes of transport (roads, railways & metro lines), power generation and its distribution, and development of Special Economic Zones (SEZs), are integral components in fuelling the growth of any economy. But Indian infrastructural development has been hinged by gross mismanagement of resources, superfluous project delays, and lethargic approach of public project contractors.
Thanks (but no thanks) to them, there is a massive opportunity in this sector for India Inc. now. Consistent underperformance has compelled the government to opt for a more fruitful public-private partnership (PPP) model. This brings into picture private players like Anil Dhirubhai Ambani Group's (ADAG) Reliance Infrastructure Limited (R-Infra). As expected, the company's aggressive business expansions in infrastructure have all the trappings of an ADAG group company, as the group has shown a considerable risk appetite for sunrise sectors.
It would be foolhardy to imagine that the economic stimulus plans of a developing economy (India) and a developed economy (US) would have much in common, but then economic crises' can prove to be great levellers! One of US President Barack Obama's major bets on reviving the US economy is his proposed multi-billion dollar infrastructure plan (the largest since the 1950s, upward of $500 billion). India also recognises the criticality of fast-paced infrastructure development & has planned investments of about $410.61 billion ($1=Rs.48.76) in the 11th 5-year plan (again the largest since the 1950s, don't need to refer that!!!).
That's where the similarity ends, more or less. Obama's end game is that he has to generate millions of jobs from somewhere and has few options to do so. India needs to invest in infrastructure primarily because… errr… we need infrastructure… simple as that, and badly so! The infrastructural support systems like routes of transport (roads, railways & metro lines), power generation and its distribution, and development of Special Economic Zones (SEZs), are integral components in fuelling the growth of any economy. But Indian infrastructural development has been hinged by gross mismanagement of resources, superfluous project delays, and lethargic approach of public project contractors.
Thanks (but no thanks) to them, there is a massive opportunity in this sector for India Inc. now. Consistent underperformance has compelled the government to opt for a more fruitful public-private partnership (PPP) model. This brings into picture private players like Anil Dhirubhai Ambani Group's (ADAG) Reliance Infrastructure Limited (R-Infra). As expected, the company's aggressive business expansions in infrastructure have all the trappings of an ADAG group company, as the group has shown a considerable risk appetite for sunrise sectors.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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