The Government should make infrastructure policies more predictable along with efficient dispute redressal mechanism rather than throwing concessions to attract investments, in the forthcoming Budget.

Addressing the audience at the BusinessLine ‘Count Down to Union Budget, 2017’ event on Wednesday, Vibhav Kapoor, Group Chief Investment Officer, Infrastructure Leasing and Financial Services, said infrastructure development has been the focus of the Budget for the last few years but how much of the planned investment was really made and what result it has delivered is debatable.

Huge amount of money in infrastructure projects is locked in disputes and an efficient mechanism needs to be developed to unlock these investments. While infrastructure companies have started raising money through bonds, getting equity investment remains a major challenge, he said.

Kapoor said foreign equity investment is not flowing into infrastructure companies because they are not yet convinced of the viability and profitability of the project.

Padmanabhan Nair, President, Infrastructure Development Corporation (Karnataka), a subsidiary of IDFC, said flush with funds after the demonetisation of high value currency, the Government has a good opportunity to spend on infrastructure.

It should develop sector-specific small and medium public-private partnership infrastructure projects involving NGOs in rural areas and funding can be tied up as the requirement may not be very high, he said. S Sittarasu, CEO, Jawaharlal Nehru Port Trust’s Special Economic Zone, said attracting investment in SEZ has been a challenge as the land can be leased to investors only for 30 years and the levy of minimum alternate tax has taken the sheen off SEZs.

‘No confirmation’

“We had delegation from about 60 countries in the recent roadshow to attract investment in the SEZ. Though everyone was more than convinced on opportunities in India, not many gave confirmation on investment as they were not sure of implementation,” he said.

Drawing a parallel to the difficulty Tata Steel faces in developing its SEZ in Bhubaneshwar, Sittarasu said managing the resistance from villagers who lose out their land in these kind of projects is another challenge. Sittarasu had worked as Vice-President of Tata Steel’s SEZ project in his previous stint.

Pawan Agrawal, Chief Analytical Officer, Crisil Ratings, said the government should initially provide guarantee to make the bonds issued by infrastructure companies attractive for investors.

The infrastructure sector needs about ₹43 lakh crore till 2020. A vibrant bond market is the need of the hour as banks with stressed balance sheet cannot provide such huge funds, he said.

Earlier, inaugurating the event, R Srinivasan, Editor, BusinessLine , said while there are many challenges and opportunities, it is critical that the upcoming Budget sets the base for the future taking into account recent developments, including the GST and demonetisation.

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