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“It depends on the environment. The markets have to be conducive for investment to happen and so do the projects,” said Issac George, chief financial officer, GVK Infra.
S Nandakumar, senior director of India Ratings and Research feels that government should clear policy 'cobwebs' if they want to attract large debt inflows from fixed income players, particularly foreign investors. The Budget encouraged low-cost long debt via infrastructure debt funds, and will also allow institutions to raise as much as Rs 50,000 crore in debt-free infrastructure bonds 'strictly' on need basis.
Highways sector reached a state of maturity, said P Chidambaram, and instead of an allocation, it will get an independent regulator. “It will be most welcome and will help resolve a lot of disputes. We have been asking for an independent engineer to regulate concession agreements, as they report to National Highways Authority of India (NHAI),” said Mukund Sapre, Executive Director, IL&FS Transportation Networks.
The possible order bonanza of 3,000 kilometers of roads in the first half of next financial year, brought mixed reactions. Though there has been a dry spell, the sector was expecting new projects accounting to 12,000 to 15,000 kilometers per annum. “It is mood uplifting considering nothing has happened last year which was a washout. But in context of what needs to be done, it is not encouraging. It is like a teaser,” said Shankar Raman, chief financial officer of Larsen & Toubro.
The incentive to be able to deduct an investment allowance of 15% of investment of Rs 100 crore on the plant and machinery too will not spur any rush of orders for capital goods companies. “Tax concession themselves are not reasons to invest though concessions help,” said Shankar Raman.
Manufacturing sector has been battling excess capacity and reducing in demand, and these do not call for fresh investments. However, companies which want to order new equipment and delaying the decision making might place orders. A number of orders were held up last year as companies decided to extend the life of their aging equipment.
“There are many Indian companies which are making profits. This should entice them to go ahead with their expansion and investment,” said M S Unnikrishnan, managing director of Thermax.
