PPP projects may also see rise in debts with the hike in repo rates. This would worsen the situation for it as they are already marred by problems of lack of decision making, he told CNBC-TV18.
Also read: Message from Raghuram Rajan: RBI will not be govt's poodle
Below is the edited transcript of his interview to CNBC-TV18.
Q: The governor has made it amply clear that inflation is the top priority. There is quite clearly a signal of rate hike. Banks have already told us that rates will go up in the system. Is the recovery now getting pushed back a bit more specially for infrastructure?
A: In infrastructure, nothing much has happened in the last one week. After the RBI new governor has come, there has been an infusion of confidence in leadership of institution and organizations. There was a bull run for almost last 7 days.
Besides the effect of credit policy, there is also a slight correction which the market is seeing. Being a Friday, profit booking might be happening.
Infrastructure is a big ticket area and the impact on this it will take time to come. The implementation of policies and the confidence of the market on governance and decision making is there. I am not talking of the political leadership. The leadership at institutional and organisational levels is also very critical and Reserve Bank of India (RBI) is a bright example of how change of leadership creates a impact on the whole market situation.
Going forward, if the international situation is improving, if the governance issues are addressed and the implementation issues are taken care of, the decision process is taken care of then things will improve slowly.
However election is coming, political indecisions, lack of stability and nobody seriously wants to really revive the infrastructure sector which can hold the economy.
Q: With the hike in the repo rate and plus State Bank of India ( SBI ) has also increased their base rate by 10 basis points on Thursday. Does it just worsen the conditions for high debt companies particularly in the infrastructure space? Is the turf going to get more difficult?
A: Already the infrastructure segment, especially the public private partnership (PPP) sector will be hit the most because this is a debt-based business. More the projects, more the debt, so, they will be hit very badly.
Nonetheless, more than the interest rate PPP is affected by the system which mocks PPP.
It is a common knowledge today, on land acquisition, environment clearance, forest clearance all the projects are suffering. But here it is a PPP and public agencies on their default sit on their own judgement and try to protect themselves without having any accountability of their performance or non-performance.
Even more than the rate surely higher rate will affect this business the most, but decision making is the biggest stumbling block in this sector. Implementation and no leadership problems are at different public sector institutions.
Q: Is there risk of reporting full year losses for this year. In Q1 you did report a loss?
A: Some consolidated loss was reported. This year we are likely to complete another two, three projects which will come into operation. Our topline will go up. Unless the interest rate is going up drastically at the year end, we will be doing much better than what we are doing presently.
Some of our dues on different institutions are pending today specially the road, port sector. Once those payments start coming in we will be in a much better position.
Anda sedang membaca artikel tentang
No revival till 2014 polls; rate hike to hit infra: Gammon
Dengan url
http://kebugaranhidup.blogspot.com/2013/09/no-revival-till-2014-polls-rate-hike-to.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
No revival till 2014 polls; rate hike to hit infra: Gammon
namun jangan lupa untuk meletakkan link
No revival till 2014 polls; rate hike to hit infra: Gammon
sebagai sumbernya
0 komentar:
Posting Komentar