Short-sighted policy key roadblock to infra development: Srei Infra CMD

He was speaking at the two-day Indian Management Conclave at ISB

Short-term policy approach of the government in the last 3-5 years towards the infrastructure sector was posing a bigger risk to the growth of sector, which otherwise had done better since 1990, said Srei Infrastructure Finance Ltd chairman and managing director Hemant Kanoria.

According to him, the sector was at crossroads being unable to exploit sustainable sources of financing.

“Because the people (government) are looking at it from a very short-term perspective, many laws that were made during the period have started affecting the sector. As a result, if you see the capital market today, it is almost dead for the infra sector. There are hardly any IPOs which come out. The corporate bond market is just not there in India. So, how are people going to raise capital for infra financing,” said Kanoria in his special address at the two-day Indian Management Conclave at ISB here today.

Further, if the policy is not value driven — making way for monopolistic tendencies — the aspect of fair pricing for consumers would take a hit and would thereby affect the sustainability of the infrastructure project, he said.

Citing the public-private partnership model, he said India succeeded in drawing private sector participation in implementing several PPP projects in the last more than two decades. “Infrastructure in the last 20 years did extremely well in the country because we have been able to create a model which was unique. No other country, be it Europe, US and China, had a model that encouraged PPP in a large way that India had done. We may be criticising that things are not well. Going back to 1990, and seeing infra then and infra now, there’s a marked difference.”

Kanoria also said the infrastructure ecosystem in the country was facing a dearth of talented workforce. “When we hire people, what we see is that they don’t have a deep understanding of sector,” he said.