Moneycontrol Pro Panorama | Act quickly on new public project guidelines

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Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

Infrastructure has been at the forefront of India’s economic development. The sheer number of programmes and policies from the National Infrastructure Pipeline and National Monetisation Programme to electronic parks, defence corridors, industry clusters and export zones underscores the government intent.

But that intent and vision alone are not enough is clear from the recent findings by the Ministry of Statistics & Programme Implementation (MoSPI). Of the 1,670 mega and large projects monitored by the agency, a jaw-dropping 438 reported cost overrun of about Rs 4.3 lakh crore till September and 563 reported a delay in completion from the target date. Worse, the reasons cited for these delays are the same for decades- delays in land acquisition, clearances, detailed engineering and legal disputes!

How different then is the recent rejig in guidelines of procurement and project management? To be sure, industry veterans have lauded the shift away from L1 in project awards and proposed clearance of payment within ten days. Such reforms may be bold, but run the risk of being another failed attempt, unless implemented in the true spirit. Besides, apart from grandiose budgetary estimates, much depends on central and state finances and innovative infrastructure financing.

For that matter, financing economic transition is a hot topic of debate in recent times not just in India but globally. At COP26, the global meet to address issues of climate change held at Glasgow, the key issue is the cost of economies moving to “net zero”.

Various governments and central banks have chosen different paths. In today’s edition, Subir Roy’s article points out that the Reserve Bank of India must find ways to fund investments in renewable and green technologies. In fact, it could learn a few things from other central banks.

Of course, the onus is also on businesses to live up to the commitments made at COP26. While the mood is upbeat at the Glasgow conference, there are critics questioning the credibility of the 'net zero' promises made by the private sector. Read the FT story here (free for MC Pro subscribers).

More investing insights from our research team:

Zomato: Record revenue comes with rising costs; valuation expensive

Ujjivan SFB – The road to recovery may be long

Thangamayil Jewellery: Can this jewellery player re-rate further?

Vidhi Specialty: Is the margin contraction a worry for the long term?

What else are we reading today?

Start-up Street: Still a long road to angel investing in India

Semiconductor strategy — Play to your strengthPicks from our Technical Analysts

Tata Motors, UPL, Karnataka Bank and Tata Steel(These are published every trading day before markets open)

Vatsala Kamat
Moneycontrol Pro