The latest research report by CRISIL on private sector capex is a clear indication of the extent to which growth has been stalled by policy inaction and lack of speedy clearances of projects. As per the report, India Inc's capital expenditure will dip by 14 per cent in 2012-13, which will also be reflected in the slowest growth in the fixed asset base in the past four years. At 35 per cent, the decline will be far steeper in private sector investments. Less than one-fourth of the total planned capex in 2012-13 is towards new projects which mean a subdued investment climate can arrest the prospects of an early economic recovery. Interestingly, lack of funding was seen as the least hindrance, whereas over 70 per cent of those polled identified policy inaction and lack of speedy clearances among the top factors responsible for the current slowdown. Rubbing salt into the wound, we have the latest reports from CAG on 'Coalgate' where the estimated loss is Rs 1.86 lakh crore. The construction equipment industry's performance is directly linked to the investment in infrastructure. The current scenario has, to a great extent, dented the confidence of an industry that has been expecting a recovery from September 2012. Even though it is reported that investments in metals and certain infrastructure sectors (roads, ports and power) will see growth in capex, a large part of the capex has been deferred. This is a far from desirable situation, and it is time for action as in the famed story of the mouse penned by Dr. Spencer Johnson. A mouse, when he suddenly finds that his cheese has been moved, gets into the maze and start searching ? not the misplaced piece of cheese but for a fresh piece of cheese.
Though the short-term prospects seem to be bleak in terms of fresh investments and announced projects actually getting into execution mode, which may result in the growth in sales of equipment, the long term growth prospect still is quite bright. The construction sector in India is likely to continue its growth above the average GDP. The second edition of the bC India scheduled in 2013 is expected to host around 700 exhibitors and over 30,000 visitors, and will occupy 130,000 sq m of exhibition space at the Bandra-Kurla Complex, going up from 88,000 sq m at the last fair.
India Construction Festival 2012
On a related plane, we have good news.
Professionals from different parts of the world keenly look for opportunities to connect with India's business leaders, learn more about the unique business environment and explore partnership opportunities. The ASPIRE International Group, identifying this need, is organising the India Construction Festival 2012, from 12 to 15 September.
The comprehensive line-up of specialised events aims at gathering leaders across the globe and connecting them with their Indian counterparts. The events are designed to facilitate sharing of knowledge and insight about business in India by creating high-level fora for discussions and building networks.
The schedule of events is as follows:
? 10th Construction World Annual Awards - 12 September 2012.
? Infrastructure Today Leadership Summit - 12-13 September 2012.
? 4th Equipment India Conference - 14-15 September 2012.
This clearly shows that India Inc is not cowed down by the dismal scenario. It is business as usual for them, thanks be.