Joseph Mariathasan: The decline of India’s infrastructure buyers

first_imgAs anyone who has travelled around both India and China can attest, India lies a couple of decades behind China in terms of the quality of its infrastructure.This provides both frustrations and opportunities for investors. To create infrastructure that is on a par with China’s will take many years and gargantuan amounts of investment. Finance minister Arun Jaitley has estimated that India required $646bn (€590bn) over the next five years alone, 70% of which would be required in the power, roads, and urban infrastructure sectors.How well money is spent on infrastructure is as important as how much money is spent. To that end, economists and policy makers such as Ajay Shah – a professor at the National Institute for Public Finance and Policy in New Delhi – have long argued that the private sector should play a greater role in financing infrastructure in India.For investors, this sector also offers a potentially attractive and relatively low-risk strategy for taking advantage of India’s undoubtedly attractive long-term growth rates. For India itself, Shah argued that private ownership would give better hardware, as such investors care about what is being built. It would also give better safekeeping of the assets. He argued that private owners would strenuously push for adequate user charges, and act as a counterweight against the biases of the Indian political system in favour of low user charges and hence a burden upon the exchequer. The private sector is willing to walk away from unviable projects, in contrast to governments, which will build infrastructure in respond to political pressures. Shah made the case that Indian public finance would be better off with its balance sheet freed from infrastructure assets, with these instead held by listed utilities companies issuing debt and equity. By accessing global investors it is possible to deliver low-cost financing.With increasing interest in India from foreign investors, it might seem surprising that recent years have actually seen a marked drop in the share of private sector financing of infrastructure projects in India. From 2003 to 2011, there was a massive increase in private sector financing of infrastructure projects. By 2011, there was a stock of roughly $400bn of private infrastructure investment projects that were under implementation, according to Shah.But in the years following, the value of private infrastructure projects receded substantially to the tune of around $80bn in nominal terms. If inflation were taken into account, it would amount to a decline of 25%. In contrast, public sector financing of infrastructure has seen a steady growth since 2011, so the overall level of investment remained reasonably stable.It is not clear why private sector investment has declined. The original logic in favour of greater private participation in infrastructure remains unchanged. As Shah argued, the private sector would use capital more effectively, deliver a better incremental capital-output ratio, and take care of assets better. The compositional shift in favour of public infrastructure projects he saw as a weakness in India. The reason for the shift, he speculated, might be that in the first wave of private sector participation the Indian authorities did not adequately understand that it required complex institutional machinery.Instead of addressing the issues to enable private sector involvement, Shah said there had been an excessive willingness to give up on private sector participation and make do with muscular state-led investment. Such centrally planned projects have their strengths, but as the experience of China has also shown, there is a risk of large investments producing low returns in terms of incremental GDP per unit investment.For foreign investors, infrastructure investment in emerging markets could potentially offer attractive yields with relatively low risks and large capacities, albeit illiquid. India, with its political stability, should be able to provide infrastructure investments at attractive yields and risk levels for long term pension and sovereign wealth funds.It would be a shame both for India and for foreign investors if a framework could not be developed that gave them the comfort to invest in Indian infrastructure.last_img read more

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Cricket News Virat Kohli’s India achieve rare distinction in double declaration vs Australia in Boxing Day Test

first_imgNew Delhi: Virat Kohli’s Indian cricket team declared early on day 4 of the Boxing Day Test against Australia after they had reached 106/8, with Pat Cummins taking his career-best haul of 6/27. India set Australia a target of 399 but the Indian team achieved a rare distinction in Melbourne. In the first innings, they had reached 443/7 declared thanks to Cheteshwar Pujara’s 106 and fifties from Mayank Agarwal (76), Virat Kohli (82) and Rohit Sharma (63*). This was only the third time in their cricketing history that India had declared twice in the Test match in an overseas tour. Out of the three, this was the second time that they had achieved the feat in Australia.Before the Melbourne Test, India had declared twice overseas for the first time during the Sydney game in 2004. Sachin Tendulkar’s brilliant, unbeaten 241, combined with VVS Laxman’s 178 helped India reach 705/7 declared, which is their second-highest overseas score in a Test match. In the second innings, Rahul Dravid’s 91* and another aggressive 60* from Tendulkar helped India to 211/2 declared but the match ended in a draw as Australia held on to give Steve Waugh a bittersweet farewell.Read More |Yearender 2018: Virat Kohli’s list of dodgy decisions hurt IndiaThe second instance was in the 2007 Test against Bangladesh in Chittagong. Sachin Tendulkar (101) and Sourav Ganguly (100) helped India to 382/8 declared and they managed a lead of 144 runs after bowling Bangladesh out for 238. In the second innings, in the quest for quick runs, India lost wickets but they declared at 100/6 to set Bangladesh a target of 250 runs but the hosts held on for a draw.Read More | India vs Australia, live cricket score: Bumrah strikesOverall, there have been six instances of overseas teams declaring twice in a Test in Australia. West Indies were the first to achieve this feat when they scored 350/6 and 124/5 declared in Sydney to secure a 30-run win in 1931. England declared twice in a Test in 1986 at WACA, Perth while New Zealand also achieved a double declaration feat in 2001 also at the WACA. South Africa declared twice in 2006 in Sydney but they still lost the game.India would be hoping that they can secure a win in a double declaration for the first time in their history in the Boxing Day Test in Melbourne. For all the Latest Sports News News, Cricket News News, Download News Nation Android and iOS Mobile Apps.last_img read more

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Jon Gruden sends Raiders scouts home, doesn’t ‘know who to trust,’ report says

first_imgStress levels can rise in NFL team headquarters heading up to the draft, as teams assess potential picks and trades that can make or break a franchise’s future.That said, things apparently reached a breaking point at Raiders headquarters Friday. According to NFL Media, Oakland head coach Jon Gruden and general manager Mike Mayock “sent their scouts home for the weekend and they are not expected to return by draft time.” According to the report, Gruden and Mayock “don’t know who to trust and wanted to clear the room.” NFL Draft 2019: Raiders reportedly ‘super impressed’ by Dwayne Haskins Sources: #Raiders coach Jon Gruden and GM Mike Mayock sent their scouts home for the weekend and they are not expected to return by draft time. The belief is they don’t know who to trust and wanted to clear the room.— Ian Rapoport (@RapSheet) April 19, 2019That report prompted rampant speculation. Are Gruden and Mayock concerned about a mole in the Raiders organization, someone possibly passing along the team’s draft strategy to another team or teams?  Has Gruden’s strong opinions on player personnel decisions led to negative feedback from others in the organization? Or have Gruden and Mayock already made up their minds and don’t want outside noise affecting their decisions? Related Newscenter_img NFL Draft 2019 odds, prop bets: Will Kyler Murray go No. 1 overall? Whatever the case, Gruden and Mayock have a few more days of strategizing before the draft begins Thursday. The Raiders are loaded with high picks this year’. They hold their own pick at No. 4, the No. 24 pick they received from the Bears in the Khalil Mack trade and the No. 27 pick (from the Cowboys for the Amari Cooper trade). Their second-round pick comes at No. 35 on the draft board.According to Bleacher Report earlier this week, “not many would be surprised” if the Raiders cashed in some of those draft picks to trade for the No. 1 overall pick, to choose either Oklahoma quarterback Kyler Murray or Ohio State edge rusher Nick Bosa. Having team meetings where someone untrustworthy could tip that strategy obviously could affect negotiations.last_img read more

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