Country’s infrastructure industry has been going through troubled waters since last couple of years and with general elections just around the corner, all eyes are set on the new Government and its policies towards the beaten down sector. Deepak Parekh, Chairman of HDFC expressed concerns over the sector and stressed that the next major task for the new Government would be to revive investment in infrastructure.
Speaking at the India Economic Convention organised by India Foundation, Parekh said the country needs $ 1 trillion in the 12th Five Year Plan of which 47 per cent was to come from private sector, but it has not happened in the first two years of the Plan period. Concerned over surging non performing assets (NPA) in banks, he said, “11 banks have NPAs of over 5 per cent.” While the majority of these NPAs are coming from infrastructure sector and hence steps are required to fix this rise, he added.
While Banks need more capital to tackle this rise in NPAs but banks, he said has “inherent problem” in raising equity as government’s capital infusion is “inadequate”. For current fiscal Government infused Rs 14,000 crore in public sector banks and has earmarked Rs 11,200 crore for next. Parekh stressed on deepening of equity markets to deal with the problem. listing out a 10 point agenda for the new government, he said India needs to privatise coal sector to reduce dependence on imported coal, which is a huge drain on exchequer.
He stressed on inter-ministerial coordination so that they do not work in silos. The banker advocated corporatisation of railways, improving existing urban infrastructure in addition to development of new cities and FDI in different spheres of economy. Parekh further said politicians need to back bureaucrats in policy making to boost their moral and confidence. lamenting that India fares poor on ease of doing business in global list, he said the next government should work towards improving this. There is also need for clear and transparent policy for furthering business confidence, he added.