Govt's development agenda may take backseat in election yr: L&T

Naik's comment, made while announcing L&T's annual financial results, coincides with UPA government's ninth anniversary today

Larsen and Toubro Chairman A M Naik today said government's development agenda could take a backseat due to the forthcoming elections and India should be satisfied with a 6% growth this fiscal given the present macro-economic conditions.

Naik's comment, made while announcing L&T's annual financial results, coincides with UPA government's ninth anniversary today.

"No new investment is taking place as such in the private sector that we know of because most of the companies have overstretched themselves in terms of public-private partnership," he said.

The L&T Chairman termed himself "very cautious" about the present macro-economic situation.

"I won't call myself giving a very optimistic view but at the same time there is no need to be very pessimistic as well and 6% growth if it finally happens, I think we should be satisfied because not many countries have even 6% growth," he added.

Naik further said that things are likely to improve only after general elections next year though will depend on the stability and policies of the new government.

"... Sometime from  June, July or August next year, which means one-one and half years, I think things will look up and that is really what I expect that next year after the elections, the growth rate should increase slowly and reach to 7.5% sometime by March 2015," he said.

According to him, "There are now few states elections, then there is general elections, so I think there is going to be more and more social compulsions and the development might perhaps take a second priority. Consequently the growth, as I mentioned, is not expected to be more than 6%."

Calling for priority to projects in power and infrastructure sectors, Naik said many foreign firms were wary of investing in India due to many regulatory hurdles and stoppages.

"...The foreigners are not necessarily very excited because they feel there are too many hurdles, too many permissions, too many stoppages and therefore they cannot plan the projects and the cost therefore, in a very very accurate manner," the L&T Chairman said.

Noting that private developers face many problems in executing public-private partnership (PPP) projects, Naik said that he had "serious doubts" whether government's aim of securing 50% investment from the private sector during the 12th Five Year Plan for the infrastructure sector will be achieved.

"... So may be, 25-30% in this (12th Five Year Plan) will be PPP projects because there is still a lot of attractiveness to be built by the government, particularly, for power and infrastructure projects," he said.