Development Watch – Week #3 Nov ’24
Development News
Rural demand drives growth in 2nd half of FY-25
India’s economic growth in 2nd half of this financial year will be driven by rural demand and government spending. The rural economy is gaining momentum. Consumer durables and non-durables are showing strong performance. The manufacturing sector is also exhibiting growth. However, there are signs of a slowdown in industrial growth. The report anticipated that the rural economy gains momentum, with the government’s continued emphasis on infrastructure and welfare spending also expected to contribute positively. A strong performance in consumer durables, with demand remaining resilient amid an improving economic outlook. Production of consumer durables such as home appliances and electronics saw YoY increase of 6.5% in September.
Women to get 100% ownership in Phase 2 of PMAY Housing Scheme
Indian government is aiming to empower women in rural areas by ensuring they own houses built under PMAY rural housing scheme. The scheme aims to provide 100% ownership of houses to women in its 2nd phase. Currently, 74% of the houses built under the scheme are owned by women alone or jointly. A new survey, Awas-Plus 2024, will identify beneficiaries. The survey includes a self-survey option for greater inclusivity. The government aims to complete the construction of 2 Crore houses within one year. To identify beneficiaries for 2nd phase, the Union Rural Development Ministry is launching a new survey. It is a “self-survey” option, allowing to upload their information directly through an app. The government aims to identify remaining 80 lakh beneficiaries through this survey.
Gentari’s $900 million green deal with Brookfield Assets
Gentari is the clean energy arm of Malaysia’s state-run Petronas Group, has agreed to acquire a part of renewables portfolio of Brookfield Asset Management for $900 million. This in inclusive of debt, following months of talks. Through an agreement, Gentari will take control of a 2.2 GW portfolio of assets. The first time Brookfield will be monetizing part of its green energy portfolio after building, acquiring and operating the assets for over 5 years. Gentari will seek regulatory approvals in next few days and its portfolio in India will double from the current 2 GW capacity. These projects are in 4 clusters – 500 MW in Rajasthan, 50 MW in Gujarat, 300 MW in South India, and 80 MW in Madhya Pradesh. Gentari has bought 185 MW solar power of Finnish firm Fortum Oyi in May. Final deal value could go up to $1 billion in enterprise value. It is linked to certain earnouts or deferred payments that are expected to kick in.
Delhi solar portal to be launched for consumers
Delhi CM has launched the Delhi Solar Portal to simplify rooftop panel installations, aiming to achieve 750 MW of solar power generation. The portal provides a centralized platform for information, on installation, vendor lists, subsidy applications and net metering. This encourages residents to become prosumers by generating and contributing excess solar power to the grid. “Prosumers” are power consumers who generate extra solar power by installing rooftop solar panels with the help of the portal. Rooftop solar panel installation will help consumers having over 400 units of monthly power consumption to enjoy subsidy benefits.
The solar calculator in portal can estimate solar power generation capacity at specific rooftop, savings to be made, list of vendors and rate of solar plants. Power consumers generating extra solar power (“prosumers”) will be paid @Rs. 3 per unit for solar plants up to 3 kW and Rs. 2 per unit for up to 10 kW plants. Group housing societies and RWAs can also avail generation-based incentive @Rs. 2 per unit on installation of rooftop panels. Commercial and industrial consumers can avail incentive of Rs. 1 per unit. 1 kW plant generates about 100 units and installation cost of plant ranges from Rs. 40,000-60,000 per kW. National level subsidy of Rs. 2,000 per kW for up to 5 kW.
Model logistics plan for Delhi, Bengaluru for urban freight
The Department for Promotion of Industry and Internal Trade (DPIIT) has finalized model city logistics plans (CLPs) for Delhi and Bengaluru with an aim to improve urban freight efficiency and cut logistics costs. Under the Indo-German Technical cooperation, Deutsche Gelleschaft for International Zusammenarbeit (GIZ) green freight project has supported relevant state authorities in the preparation of the model CLPs and adopting international best practices. This will help reduce congestion, pollution and logistics costs while improving overall quality of life. The framework would help incorporate specific local needs and peculiar city characteristics. In 2022, India launched National Logistics Policy which includes support for development of city-level logistics plans. European countries like Germany, France and Netherlands have developed comprehensive city logistics plans.
Rs. 30,000 Crores fund for shipbuilding
India is launching a Rs. 30,000 Crores Maritime Development fund to bolster its shipbuilding industry and aims to lead the world in ship recycling by 2030. The government is also planning 3 mega shipbuilding clusters and extending financial assistance programs to support the ministry’s growth.
First landing of Sea Plane in Assam
A seaplane successfully landed at Pandu Ghat in Guwahati on Friday, after a successful flight from the City airport. It has become the first such plane to land in Assam. The addition of seaplanes to the state’s transport network is expected to boost connectivity and tourism. This initiative aims to enhance tourism and connectivity by connecting major tourist spots located near water bodies. The seaplanes are expected to be operational within the next 6-12 months. The “amphibian airplane” demonstration in Guwahati by M/s de Havillans Canada in collaboration with the Ministry of Civil Aviation. Almost all tourism sites of the state are located near water bodies, like Kaziranga, Umrangso and Majuli.
Indian Railways to test first Hydrogen Train
Indian Railways is gearing up to test its inaugural Hydrogen-powered train in December on the Jind-Sonipat route in Haryana. The distance is a 90km route. The train, capable of reaching speeds of 140 kmph, uses fuel cells to generate electricity with water vapor as the only by-product. If the December trial is successful, the Railway network plans to introduce 35 more hydrogen-powered trains by 2025. The hydrogen-powered train has been manufactured by the Integral Coach Factory in Tamil Nadu. It uses fuel cells that combine hydrogen and oxygen to generate electricity, with water vapor as only emission. Railways has also awarded a pilot project for retro-fitment of Hydrogen Fuel Cell on existing diesel Electric Multiple Unit (DEMU) rake along with ground infrastructure at the cost of 111.8 Crores. This is planned to be run on Jind-Sonipat section of Northern Railway. Other countries which have adopted Hydrogen train technology include Germany, Sweden and China.
Rs. 3,800 Crores infrastructure fund
Alpha Alternatives Fund Advisors, an asset management arm of Alpha Alternatives group has raised $450 million or nearly Rs. 3,800 Crores as the first close of its maiden infrastructure fund alpha alternatives, Build India Infrastructure Fund (AABIIF). Through this fund, the multi-asset class investment firm is looking to raise a total of $750 million or Rs. 6,300 Crores. This also includes a green shoe option of up to $250 million, or Rs. 2,110 Crores. The fund will invest in Indian road assets, including a strategic partnership with Dilip Buildcon. They plan to establish an infrastructure investment trust (InvIT) for existing assets by 2025.
Urban planning needs to shift from myopic to surplus mindset
The issue of urban infrastructure must be treated as a national priority, with work undertaken at war footing to improve the lives of India’s citizens. DLF Chairman Emeritus talks about current issues plaguing urban development, and how this wasn’t his vision for Gurgaon, and planning his succession. He expressed concerns about poor air quality and traffic congestion, highlighting gap between India’s economic growth and its urban planning. There also needs to be more collaboration between public and private sectors.
NCR construction ban to delay projects and livelihoods
Construction ban in NCR is expected to delay real estate projects. However, exempting RERA-approved projects from GRAP could balance public health, economic stability and essential development. This year, however, some of the polluting work is permitted as per guidelines. Although the construction ban lasts only few days, developers often need additional time to remobilize their labour force and restart activities. RERA approved projects which already adhere to stringent pollution control norms. Allowing non-polluting construction activities could strike a balance between environmental protection and economic stability.
Local Feedback
LocalFeedback.org aims to track and document actionable parameters that help improve urban and rural infrastructure. The founder, Susmita, has juggled diverse roles in real estate, project budgeting, valuation and execution on construction sites. Having traveled to more than 20 countries, she has worked across 4 regions in India. Her areas of interest include sustainable buildings, electric mobility and urban development. She visited top-ranking cities on livability indices and has presented published papers at international conferences.