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Development Watch – Week #4 November ’22

Development News

Increase in rural spending towards jobs, housing

Finance Minister of India may present the 2023-24 budget on February 1. The government has allocated 1.36 trillion rupees towards Ministry of Rural Development for 2022-23, but next year it may spend more than 1.60 trillion rupees or even 2.0 trillion ($24.5 billion) as per some government sources. The information is yet to be made public. This would address pandemic-driven stress in rural areas. More people have signed up for the MNREGA scheme in the last few months. The country also seeks to boost jobs and affordable housing in the rural areas.

Redevelopment of Mumbai’s CST Station

Railway Land and Development Authority (RLDA) has conducted pre-bid meetings for redevelopment of Mumbai’s iconic Chhatrapati Shivaji Maharaj Terminus (CSMT) station. Companies like JK Infraprojects, L&T, Tata Projects, NCC Ltd, Ahluwalia Contractors, Creative Group LLP, Assystem STUP, etc have shown interest. EPC (Engineering, Procurement and Construction) mode will be followed for the bid process. The scope of work includes Civil and MEP works for the main building. Associated infrastructure works will be carried out for the outer iconic facade, ultra-modern station buildings, refurbishment of heritage buildings and creation of suburban nodes. Other major improvements will also include a new building at south heritage node, and connection through skywalk from Mahatma Jyotibha Phule Mandai (formerly known as Crawford Market).

Government projects key for recovery of Construction firms

Government projects will be of significant help in paving the road to recovery for construction companies. The ET Construction Index has risen 8.1% in a month compared to 4.1% return of Nifty 50 benchmark index. The index comprises some of the biggest listed construction companies in India. The fast pace of awarding of government projects, and execution speed, have contributed to this growth. These factors will play out (positively) in the growth of earnings next year for the construction companies.

Renewables growth help meet electricity requirements

India has been following a major effort to improve coal stocks, and expansion in generation capacity of renewable sources of energy. In 2021, coal-fired plants had ran short of fuel and were unable to keep up with demand. In 2022, the electricity transmission system passed the difficult post-monsoon period with far less stress. There was improvement in grid frequency-control as well, which is a sign of a healthier and more stable network. This is can meet peak loads more comfortably, as per “Monthly operational performance report” by Grid India, November 2023). At the same time, there was a significant increase in renewable generation of 3.1 billion kWh led by 2.1 billion from solar. Smaller contributions were made by hydro (0.7 billion kWh) and wind (0.3 billion kWh). Hydro, wind and solar supplied 25.4% of all electricity consumption in October 2022, which was up from 22.8% in October 2021. This allowed more reserves to meet daily peaks and temperature-related variations in demand.

Collaboration with think tanks for EV batteries production

Department of Science and Technology and Center for Science and Environment (CSE) has collaborated to make a platform to support development of new electric vehicle (EV) batteries to suit Indian requirements. A white paper will be prepared on a roadmap for new battery technologies in India. An industry-expert platform will also be created to support the process. The aim is to develop EV batteries which are safe, durable, and effective within the constraints of a hot and humid tropical climate. Cost, safety, supply chain, and charging infrastructure are some of the additional challenges in the purview of FAME scheme.

Warehousing presence being doubled by Shipping companies

World’s biggest shipping company, Denmark-based Maersk, will double warehousing presence in India by 2023. This is coming on the back of acquisition of LF Logistics, which concluded recently. Maersk is seeking to enhance its presence as a 360-degrees logistics player. It acquired Hong-Kong based LF logistics in August 2022 for $3.6 billion. Along with LF logistics, Maersk will have a total of 19 warehouses in India by end of 2022. This would lead to a built-up footprint of 2.68 million square feet.

Domestic air traffic in India up by 10% in October

In the month of October 2022, Indian airlines carried 1.14 crore passengers. This is an increase of 10% on a sequential basis. As per DGCA data, domestic air traffic has rised 27% from that in October 2021. 988.3 lakh passengers were carried by airlines in October 2022. While the number was 620.9 lakh in October 2021. This has been an annual growth of 59.16% and monthly growth of 26.95% from September 2022.

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