Cement Energy and Environment

Our macro-economic conditions have reasonably stabilised ra1smg hopes for regaining the growth momentum. Global commodity and crude prices have considerably cooled helping the country to cut current account deficit to 1.3 per cent of GDP. It was as high as 4.7 per cent in 2012-13, when the economy faced a serve slow down. Also, fiscal deficit has been tamed at 4 per cent even below the targeted 4.1 per cent. Both core and retail inflation rates have eased prompting the Reserve Bank of India (RBI) to cut repo rates twice. In the last one year, Fils have pumped in nearly $43 billion lifting our forex reserves to a record high of $343.9 billion in the last one year from $303.7 billion in 2014. In a short span, PM has rolled out some major reform measures. These included relaxing the FDI limit in the Insurance sector and defence, easing the rules for FDI in construction, allowing FDI in railways, passing the black money bill in the Parliament and rolling out some labour law reforms. A noteworthy achievement of this Government is that it has made its coffers richer by over Rs.3 lakh crore following the auctioning of coal mining blocks and telecom airwaves. The PM has created Nitti Aayog as a new think tank in the place of Planning Commission and wants to make States a part of India growth story. It is true the business sentiments are still weak. Industrial growth is fragi le having clocked only 2.8 per cent growth in 2014-15 (2004-05 base year). The expected pick up in domestic demand and recovery in investment cycle has not yet materialised. This along with sluggish exports, have affected capacity utilisation in a number of industries including cement. Credit growth is low and primary market (IPO issues) is in a slumber. While opportunities have increased for I ndian compan ies to raise capital from abroad, corporate earnings are yet to improve. India Inc is grappling with high debt burden, high interest cost, higher freight and power charges. The Budget has its thrust on infrastructure development, "building 100 smart cities, housing for all by 2022, and new initiatives such as 'Make in India' aimed at boosting our manufacturing sector, 'skill India' and improving India's ranking in the World Bank's ease of doing business index from an abysmal 152 to 50. Till the time business confidence picks up and private corporate sector embarks on fresh investments, the Government is trying to kick start growth through public investment of Rs.1.25 lakh crore on infrastructure, roads and other sectors as envisaged in the Budget. While PM is doing his best to revive investment and growth and create value for natural resources such as i coal, limestone deposits and airwaves, it is hoped he will find a solution to the stumbling blocks being created by 'local activists' and 'vested interests' in getting timely approval for projects from authorities and Green Courts. (N. Srinivasan is the Vice-Chairman andManaging Director, The India Cements Ltd.) Courtesy: The Hindu, Chennai, May 23, 2015 2