Fresh initiatives by the government brings renewed focus to infrastructure development, and promises galore to the equipment industry, but no real opportunities to grow. It is high time for the government to immediately initiate and implement fast track solutions to resolve all pending issues, enable the industry grow to its full potential and start contributing to the Indian economy, instead of stagnating in a wait and watch mode.
ICRA reports, ?Difficulty in achieving financial closure and overall weak macro-economic environment has also reduced the risk appetite of developers towards new projects. These factors, amongst others, have resulted in relatively modest growth in Gross Fixed Capital Formation (GFCF) and Construction GVA (Gross Value Added) in the last nine months of FY15. With the political stability, sharper focus on infrastructure development and improvement in economy, new project announcements by both public and private sectors are likely to pick up in FY16?. As a result, the industry observers expect gradual recovery, linking it to funds availability. Again, this begs the question: ?For how long can they wait?? It is already a matter of survival.
The annual market demand remains stagnant for concrete pumps at Rs 1,500 crore and for batching plants Rs 450 crore. This means only 50 per cent capacity utilisation, a formidable challenge! Meanwhile, it is evident that this industry continues to offer technically advanced products to meet the challenges of producing high quality, very abrasive concrete mix designs and high-rise pumping in excess of 300 m height, essential to modern high-rise building projects. That said, this edition?s Cover Story tracks the latest developments in concrete equipment.
Our Feature on Equipment Rental focuses on issues plauging the rental industry. Differential tax rates and operating permit requirements in different states are significant impediments. Large rental companies are fairly well organised, but it is still a logistics nightmare for most.
Mobile cranes rental segment reports enormous challenges on account of poor payments and lack of standardised contract terms. There is a need to establish transparency with their customers for sustainable rental business. This industry should form a forum of crane hirers to draft and implement standardised contracts in the market.
Mainly driven aggressively by the equipment rental sector, the access equipment industry in India is still at its nascent stage when compared to developed nations. Absence of any legislation, either for personnel working at heights or restriction to importing old cheap equipment in India, implies an uncertain future for this segment. To conclude, in light of firm commitments by India?s politically stable government providing huge impetus to infrastructure, finalising pending orders' backlog in specific time frames and releasing funds for the same, the overall outlook is positive for the entire infrastructure industry.
However, all are eagerly waiting for things to happen!
Shankar Srivastava Managing Editor