Shaurya Doval, ED of India Foundation, emphasizes that new laws & enforcement of contracts will give boost to country’s infra growth in his address to students at the Policy Talk series hosted by the Public Policy & Management programme at IIMB
22 December, 2016, Bengaluru: “In modern parlance, infrastructure includes people, skills and knowledge. Such soft infrastructure will decide how hard infrastructure can enhance the country’s net comprehensive national output,” said Shaurya Doval, Executive Director, India Foundation, and MD, Zeus Capital, during his talk on ‘Investing in India's Infrastructure’ at the Policy Talk series, hosted by the Post Graduate Programme in Public Policy and Management (PGPPM) on December 21, 2016, at IIM Bangalore.
Talking about how infrastructure evolved in the country and what went wrong along the line, he explained: “Historically, infrastructure is the vital ingredient around which any economy is built. Globally, countries with high growth rate or GDP have built their infrastructure system well. India’s infrastructure story has not been able to keep pace with our population and economic growth. The reasons being, we did not have enough capital. Indian infrastructure typically requires, as of today, close to over a trillion dollars in the next five years.”
Pointing out that infrastructure development cannot happen in a country where there is no enforcement of contract, he said: “All over the world, infrastructure is usually funded by big pension funds and insurance companies that are constantly trying to do the asset-liability match. When India began its second phase of infrastructure investment in 2002-03, there was a problem as the basic requirement for infrastructure spending was missing – the ability to enforce a contract and legitimately expect certainty of income from an asset had not developed in India. Hence India was not able to generate enough capital for investment in infrastructure. Therefore, as we started to spend this infrastructure money, we ran into bottlenecks which left projects incomplete, and the money was not deployed properly. Failure of enforcement of contract is a huge hindrance.”
He listed measures taken by government to address the challenges. “In the last two-and-a-half years, these issues have been probed systematically. Legislative procedures that will ensure quick and judicious enforcement of contract, like bankruptcy law, real estate bill, civil aviation policy, changes in power sector, have begun. The government has also tried to bring down the cost of capital.”
Inviting questions from the audience, Doval touched upon topics like infrastructure in India, how infrastructure is financed, where India stands in terms of government’s policies, ways of attracting investment for infrastructure, utilization of already invested capital, and more.
Shaurya Doval, ED of India Foundation, emphasizes that new laws & enforcement of contracts will give boost to country’s infra growth in his address to students at the Policy Talk series hosted by the Public Policy & Management programme at IIMB
22 December, 2016, Bengaluru: “In modern parlance, infrastructure includes people, skills and knowledge. Such soft infrastructure will decide how hard infrastructure can enhance the country’s net comprehensive national output,” said Shaurya Doval, Executive Director, India Foundation, and MD, Zeus Capital, during his talk on ‘Investing in India's Infrastructure’ at the Policy Talk series, hosted by the Post Graduate Programme in Public Policy and Management (PGPPM) on December 21, 2016, at IIM Bangalore.
Talking about how infrastructure evolved in the country and what went wrong along the line, he explained: “Historically, infrastructure is the vital ingredient around which any economy is built. Globally, countries with high growth rate or GDP have built their infrastructure system well. India’s infrastructure story has not been able to keep pace with our population and economic growth. The reasons being, we did not have enough capital. Indian infrastructure typically requires, as of today, close to over a trillion dollars in the next five years.”
Pointing out that infrastructure development cannot happen in a country where there is no enforcement of contract, he said: “All over the world, infrastructure is usually funded by big pension funds and insurance companies that are constantly trying to do the asset-liability match. When India began its second phase of infrastructure investment in 2002-03, there was a problem as the basic requirement for infrastructure spending was missing – the ability to enforce a contract and legitimately expect certainty of income from an asset had not developed in India. Hence India was not able to generate enough capital for investment in infrastructure. Therefore, as we started to spend this infrastructure money, we ran into bottlenecks which left projects incomplete, and the money was not deployed properly. Failure of enforcement of contract is a huge hindrance.”
He listed measures taken by government to address the challenges. “In the last two-and-a-half years, these issues have been probed systematically. Legislative procedures that will ensure quick and judicious enforcement of contract, like bankruptcy law, real estate bill, civil aviation policy, changes in power sector, have begun. The government has also tried to bring down the cost of capital.”
Inviting questions from the audience, Doval touched upon topics like infrastructure in India, how infrastructure is financed, where India stands in terms of government’s policies, ways of attracting investment for infrastructure, utilization of already invested capital, and more.