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Mr. Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure Developers Ltd.
Mr. Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure Developers Ltd.

The Indian economy post going through a phase of high inflation and interest rates has significantly stabilised. At the end of the current fiscal, the country’s fundamentals have significantly strengthened with inflation being contained at 3.81%, fiscal deficit estimated at 3.5% of GDP, forex reserves surging to over USD 367 billion and repo rates declining to its lowest level of 6.25% since 2011. Driven by this, the country achieved a robust growth of 7.1% in FY 2016-17, as economies across the globe struggled. Though the GDP growth could have been more robust had it not been for demonetisation that led to temporary sluggishness. On the positive side it channelised vast amounts of idle funds back to the economy which can be effectively utilised in funding the country’s ailing infrastructure scenario. Besides, the implementation of Goods and Services Tax in July 2017 is likely to further enhance the country’s productivity and efficiency driven by faster logistics movement and simplification of taxation structure. This shall be crucial in fast-tracking infrastructure projects.

Driven by these initiatives and the pressing need for quality infrastructure, the sector is likely to witness robust growth in the coming years. The government has also showed its concerns by making its highest ever budgetary allocation of ₹3.96 lakh Crs (including ₹1.31 lakh Crs for railways) to the sector. Speaking particularly of the roads, transport and highways, a sum of ₹64,900 Crs has been allocated for it, 63% of which is for roads and bridges and 37% for NHAI. The ratio between revenue and capital expenditure for 2017-18 is pegged at 17:83 compared to 41:59 and 22:78 for the year FY 2015-16 and FY 2016-17 respectively indicating the rising focus towards capital expenditure (new construction projects).

Annual Report 2016-17

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