Not many infra projects getting off ground a concern: Munjal

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Sunil Munjal on Economic Growth and Infrastructure

During an event, Sunil Munjal, the Joint Managing Director of Hero MotoCorp, expressed his views on the country's economic growth and infrastructure projects. He predicted that the economy would grow by over 6 percent in the current fiscal year, but emphasized that the lack of progress on many infrastructure projects remains a significant concern.

Economic Growth Concerns

  • Second Quarter Growth: The country experienced a marginal growth rate of 5 percent in the second quarter of the current fiscal year.
  • Major Concerns: The slow progress on infrastructure projects is a key issue for the country.

Government Efforts and Challenges

  • CAD Management: The government has taken steps to manage the Current Account Deficit (CAD), but the implementation of large infrastructure projects remains a challenge.
  • Clearances Needed: While the central government has approved several large projects, many still require clearances from state governments.

Policy Framework and Investment

  • Decision-Making Framework: The government needs to create a framework for faster decision-making and implementation to attract foreign investments.
  • Policy Certainty: Uncertainty in policy frameworks can deter investments; certainty and the ability to implement decisions are crucial.

Confidence Levels and Cost Issues

  • Low Confidence Levels: Despite the worst being behind, confidence levels remain low.
  • High Lending Costs: High costs of lending are also a barrier to attracting investment.

Land and Environmental Issues

  • Land Ownership and Environment: Handling land ownership and environmental issues has led to project delays.
  • High Land Costs: Higher land costs translate to higher costs for products and services, significantly impacting sectors where land cost is a major component.

Conclusion

Munjal's insights underscore the need for streamlined decision-making and implementation processes to boost economic growth and attract investments. Addressing high land and lending costs is also essential for sustainable development.