It is finally official! India's $1.8 trillion economy grew almost 50 per cent faster in 2013-14 than earlier thought. The economy grew 6.9 per cent, not the 4.7 per cent as per chief statistician TCA Anant.The new methodology for measuring GDP numbers, in line with global standards, works by measuring the economy at market prices, and by tracking consumer rather than wholesale inflation. The revised formula, showing a faster recovery, includes under-represented and informal sectors as well as items such as smartphones and LED television sets in gross domestic product. This is likely to boost India´s GDP growth figure in the year ending in March 2015, beyond the estimated 5.5 per cent. The recovery of the economy is now certain with concrete evidence.
Many anticipate the forthcoming Union Budget to be a revolutionary one, a sort of panacea to all the ailments; however, sane and sound minds want it to be an ´enabler´ facilitating growth and stability rather than a mere ´sound and fury' that signifies nothing. ´Yes, there will be announcement of big ticket projects in various verticals, but most of the industry leaders EQUIPMENT INDIA spoke to wanted the budget to be ´an enabler´. It is a majority government and it can push through the developmental agenda at a faster pace, facilitating action on the ground.
There are hundreds of projects stalled due to various reasons, some 30 per cent completed and some over 50 per cent. Will the government be able to select at least 30-50 projects out of them, which are of national importance on a priority basis, and fast track their completion? Even such a move can initiate the momentum, and that is what the industry is looking for. Firstly, the government has to look at projects which can be cleared quickly and do it; should ensure and facilitate those projects are completed, should ensure the contractors get paid; that will create more positive energy in the system.
It is heartening to note that ICEMA has taken a giant leap for the betterment of the construction equipment industry. The organisation has joined hands with the Central Government and has created a ´skill council´ with a major objective of establishing training centres across the country. Another move is the setting up of a ´testing laboratory.´ According to ICEMA, this will change the outlook of the industry from safety, productivity and emission norm perspective. We also understand that there is a move to mandate registration of backhoe loaders.
Corporate results are not very encouraging yet and banks have loads of stressed debt to be able to be catalysts of growth at times like these. Yet, the stock market offers an opportunity for some companies to raise fresh capital, e.g. Tata Motors and several others, which will release some stress. Further, the budget is expected to devise mechanisms of raising funds for road and railway projects which could be a good kicker. So, all eyes on BUDGET DAY.
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