What I like about Facebook

So I have been coming across various people and online memes criticizing the whole point of being so active on Facebook.

Their point is that its cooler not to have so much time at hand to be involved in telling it to the world what you are up to.

If you are seen on Facebook a lot, it inevitable means that you don’t have any better things to do. Moreover people have the same kind of conversations over and over again. Whatever is trending is what everyone is talking about.

Well, I agree with all of it as something that may be true for them and many others. So I am not really criticizing their thought process.

I am merely utilizing the opportunity that social media has given me to voice my opinion. Whether I am heard or not, or agreed with or not doesn’t really matter for me. What matters is that I said what I felt like and that’s more than enough.

I can have an opinion without being cut short in the middle, being misunderstood over translations and passed on versions and most importantly, without feeling the need to check with the mood of the room.

Apart from the talking and the commenting, there is another very important aspect for which I cannot thank social media and especially Facebook enough and that is the facility of posting pictures.

I have posted pictures of all the important and happy times of life and I continue to do so. And as life passes on, I keep visiting my own profile to revisit all those times that I have lived in the past.

When I look at my old pictures arranged in the chronological sequence, I realize all the hardships that have gone into to be able to live those happy times.

So whenever I am sad or out of ideas or scared of the inevitable that lies ahead, I go back to my profile and revisit all those pictures and those happy times. They give me strength to have patience and wait for my time to come. 

For whatever hardships, sadness and rejections that I have faced in life when it was dark and gloomy and I had no idea what to do next, the happiness that followed them has always been worth it.

And it is for this reason that I firmly believe that the greatest thing about Facebook is that along with staying connected with your friends and family, it gives you an opportunity to stay connected with your past. Memories may get deleted but a post doesn’t. It can actually take you back to what really happened.

The ~ism’s of my world!

I am an idealist and a perfectionist in a sociological sense, though a lazy one. I think idealism is all about being brave enough to stand by what you believe is true for you and for others, the way this world around us should be.

Sure it’s a task chasing the impossible all the time but isn’t that our job as people on this earth to chase goodness and betterment in any case!

Add to that, perfectionism makes me crave for a better version of things around me almost all the time. But don’t get me wrong. My life is not so stressed out as it seems.

Laziness and constant quest for peace and happiness do manage to keep me sane, most of the time. Balancing out is the theme. It may not be a winning formula for all times. But overall I feel like this is what I want to pursue for as long as I am convinced with it.

My description of it all seems very condescending, and trust me when I say that in an ideal world I too would have found this superior showcasing for a display of character as kind of a bore.

But imagine my surprise when I tell you that all these listed qualities are exactly why some people have always chosen to mock me! Yes, I have been mocked for being an idealist and a perfectionist time and again.

The so called realists have always thrown their understanding of the “real world” as the supposedly winning argument to justify their beliefs in dishonest and morally corrupt people, manipulation by the system and bigotry citing ‘that is as good as it gets’ as the getaway line.

In fact calling them realists will be wrong as the meaning of that term actually goes much deeper and cannot be used as a label for people who live a life of fear. Incongruous is more like it.

And I have a reason to put it like that. Idealism can easily be interpreted as a positive view to life and surroundings so even if a realist doesn’t chose to totally buy into the idea of idealism, they will still be ok with idealism and realism working hand in hand.

So why is it that some people simply feel so threatened?

I feel the answer is fear. Giving in to a world order or the system which doesn’t work towards betterment of every participant only for a few short term goals, not being able to stand by what they deserve and thus accepting manipulation and bigotry as part and parcel of the times they live in is a strong indicator of the fear that lies within.

The fear that giving into whatever little is available rather than struggling and waiting for the real deal for it may never come is what the manipulators sell.

Added to that is the fear that if they let idealist be, it may in some way make them realize their own weaknesses which they may have to come face to face with and then courage might be the only option left. The thought of being courageous itself is kind of scary and indigestible to some.

So all I really want to say is be an idealist or a realist or hell! Be a surrealist, just chose not to give in to your fears and become a noise instead of a voice of reason.

My daily rumble

Hi,

I am 29 and at a stage in my life where I am old enough to have had experienced some of the very complex emotions that life offers and yet at the same time there is a whole huge list of things that I am yet to do which will inevitably lead me to its own set of experiences, needless to say the unplanned and unknown odd balls that life will keep throwing at my direction from time to time.

Everyday I come across daily and kind of routine happenings which lend me sometimes a different and at other times a deeper point of view about life. Most of the times they are in the form of theories which are basically a conclusion of my chosen experiences driven by my chosen view of those events and in some sense they help me in shaping the coming events of my nearby future. They are my theories, the daily rumble in my head.

So today, the topic was what should I do to make my everyday count. How to make it all be like a movie with a series of unrelated events leading to an ending which is more like a conclusion of a story. My story. Hence this blog.

What I really want from this blog is to account for my everyday like it had a theme and a conclusion, much like a chapter of a novel called my life. Nothing new I know. But who knows where the dots will join.

Be Kind

Our whole lives, we look for validation. We try hard for this one person to read us right, to read us the way we want them to. Our actions may not make much sense to us, but we want them to see us for what we really are, beyond the worldly definitions of our actions, to put in the hard work because we want to feel that we deserve it. We almost will them to come after us by being difficult and pushing them away when inside we are just crying for their attention and admiration.

But most of the times we fail. We fail to understand that they have their own limitations. The world is equally cruel to all of us. They don’t validate because they think that if they do then they will be taken lightly. They read us but don’t communicate for the fear that an open heart may reveal too much, may show them as weak or failing in some way. They want to know people and spend time with them but pretend that their hands are tied and they are busy when all that they are really feeling is helplessness and insecurity of being misunderstood. Moment by moment, day by day they push away people to protect themselves and us from the hurt and pain of loneliness not knowing that too much pushing away will inevitably lead to loneliness.

So this goes out to all those who are stuck in this from either side, be kind not because you care too much or don’t but because may be someone is fighting for you really hard and in the best way they know. Be kind because there is a world that exists outside of how much you can perceive of it. Be kind because you can never know whether you know enough. May be you are missing a blind spot. Be kind because you haven’t seen the world enough to know yourself completely or to know what you really value in your life. Be kind because you too may be unable to understand them just the way they are. Be kind because when you have completely pushed them away they may not know how to get you back no matter how hard they try. Lastly, be kind because you know you love them and that they mean the world to you.

Life’s Losses

And she dialed his number again today, already half expecting it may go unanswered again. This has become the norm recently. Well, in all fairness may be he is actually very busy. She knew that the world has changed and life has become busy for people trying hard to make a decent living. Still, answering one phone call a week cannot take much of his time! Gosh! She is back to complaining. She needs to try harder. Guess tomorrow will be a new day. She will try again. She held a pretty tight leash on her mind almost all the time. But sometimes she just couldn’t help it. She missed him! He was her only son. Given the chronic illness and a cranky old husband, she had a lot of time at hand. So no one could have blamed her if sometimes she let her mind drift towards trying to understand the real reasons behind her son not making an effort to be in touch with them.

Was him being busy at work all that there is to it? If not then why? It’s not like she has been a bad mother or that she has not loved him enough, and she does make sure every time she is able to steal a conversation with him to tell him how much she loves him. Then how could this be happening to her? Why her?

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“My phone is ringing, but where is it? There, next to the laptop. Oh, its mom again. Wonder why is she calling me now. What should I talk to her! I think I am busy right now. At least she should try to understand it. I will try calling her back later. But we have just spoken so recently. And there is hardly anything there to discuss. I hate going “What else!” over and over again with anyone.”

He goes back to working. Five minutes later he gets up for a coffee break.

He is getting another call. This time it is his wife. He just got married last year. He tells her that his mom just called and that he did not pick up. Most probably the wife just went silent to it. No comments. She is still taking her time understanding the family dynamics without, if that is possible, being judgmental. They talk for 10 minutes before he returns back to his desk. He likes talking to his wife a few times a day. It calms him. He likes to know everything is fine.

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Dad is calling. He is thinking of picking it up this time. Its been days since the last call home though he is not sure how many exactly. It’s a serious matter. His dad says mom is not doing well since a few days and that now he is planning to shift her to a hospital. Naturally he is upset. But he is struggling to imagine the extent of it. His mom has been in bad shape for a very long time and the family has learned to live with it. Any bad news in the past has not been bad enough to cause major concern. She always manages to get back home. He takes the matter in and hangs up. He then opens his laptop to buy tickets for two to travel back home to see his mom.

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When they  reach home they directly go to the hospital. He can see certain signs that this time it may be a tough call. The moment this thought crosses his mind, he tries to push it back and imagine believing in what he has come to know over the years – she always comes back.

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She could not survive. He is trying his best to let it not affect him as much as it has the potential to. He is in constant fear that his thoughts may over power him anytime. He bends down to kiss his mom his last goodbye. When he gets near her, she is strangely smelling of mint. Why? But she has left and never coming back.

---

When he gets back home and goes to her bed where his mom lay for the last 15 years, he found the atmosphere strangely comforting. It smelled of her. It felt like anytime he will hear her calling him. And there he saw were marshmallows on the bed side. When he was a kid, whenever he and his mom went out shopping or running errands, they made sure to treat themselves with marshmallows as a sign of fun they had from spending time together and they made sure they never told dad about it.

When his dad came in to check on him, he asked about the marshmallows. His dad told him the last conscious demand that she made from him is the reason why they were there. She had some, smiled and then after a while went unconscious. It dawned on him, the mint!

It was a long time before he took a breath in.

She was gone forever. And managed to label it as a fun time spent together. For him. Only him.

How do you get over something like that? It is worse than an actual ghost haunting you. You still hope to get rid of the ghost somehow. How do you ever get rid of this? Is it guilt that causes it? That if he cared enough to pick one of her calls, they could have had their last conversation. I would hate to label it as guilt as it assumes him as the culprit. Things have been tough for him too. Then what can it be? How could she do this to him? Didn’t she know that he is the one who is going to live the rest of his life feeling the pain? Why did she choose it for him? Wasn’t she the mature one incapable of choosing difficulties his way?

I do not know. And I am thinking of pushing this thought until later, later when I am more ready. I think I will only really know when I will be ordering my own last marshmallow.

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Something missing… There always is.

“Turns out being understood is an underrated pleasure.” The Mentalist

He asked, “What are you doing?”

I replied, “I don’t know. I guess I am just sitting in a lonely dark corner and looking at the world pass me by.”

His confusion growing, he continued, “Why are you doing this to yourself? What are you ever going to get out of this?”

I thought he was just trying to make some conversation. Even he didn’t know what to say anymore. I stayed silent for a while. After staring at the far end of the large ocean in front of me for don’t know how long, I slowly replied, “Have you ever known a feeling while talking to someone when you realize what they are saying is not actually true and so for a split second you stop, look them in the eye and stare, almost like you are willing them to stop lying.

But they don’t. They just continue with the same thing. You know the kind of relationships where you expect your slight stares get answered, the people aren’t really lying to you. They are lying to themselves. To you, they are just saying what they want to believe as the truth.

I think, the more I deal with life the more I realize, nobody really likes to know or even see the truth, let alone say it. They just want to believe what makes them happy, “really” happy. Why I quote happy is because I am not referring to the cliched or text book description of happy. By real I mean that idea which suits your own version of the world around you ad your own motivations of living in it.”

He took his time to let it sink. He said finally, “But, like it or not, that if true can be said for all of us. There is hardly anything that creates any difference. And I don’t think we are the types who would actually believe in any higher power judging us.”

“Yes” I said, “That’s true. So what do you do when you find that your idea of realism is totally screwing your belief in people and the world you live in? When you look them in the eye and all you see is their desperation to constantly justify their own selves to themselves while they go on interacting with others and thus in a way contributing to making it all a big fat lie. All of them and all the time!”

He took my hand in his and said with a slight smile, “You just give it sometime. Like you said, our ideas dupe us but they do this to make us happy. Let your ideas make you happy.”

To that I grew sightly uncomfortable. It was like I have to wait for my thoughts to manipulate me into believing that life goes on and all that we can do is to relentlessly look at the brighter side no matter how disappointed we may feel with our day to day realities. It wasn’t a great idea to sell. And I was uncomfortable because may be I too knew this.

With a tone of irritation, I replied, “May be I think I know the answer. It could be that we need to take life as it comes, make do with whatever we have and try and make the best of it. Cliched but so far seems true. The only problem is that that’s what scares me the most. That no matter how long I spend looking for a better answer, this is what I will have to settle for. It just makes my perfect world seem full of compromises.”

Suddenly, I heard a splash at a distance. I turned to see an old couple giggling like children playing with each other in water all by themselves in a lonely beach except for me at that late hour. I kept looking at them bathing in each other’s love and friendship. I so knew how that felt.

After sometime, I drew in a deep breath, got up and left thinking to myself, “It would have been fairly satisfying for an actual conversation.”

A Trip to the Bharatpur Bird Sanctuary

Last week I visited the Bharatpur Bird Sanctuary also known as Keoladeo National Park with my husband. Before starting for it I thought to myself its going to be a so so experience visiting the place as there has hardly been any talks about the place among friend groups or social networks or anywhere else except when you Google hard to search for places within reach for a quick weekend trip within a manageable distance. And so I packed light and looked for various other sites for a great place to stay to sort of make up for a probable not-so-exciting sanctuary experience.

Well, it turned out it wasn’t so necessary after all. The place is beautiful, serene and very well managed by the forest department. Since the city is mainly famous for the sanctuary, one can find enough to read on birds and in general the history of the place. One can sit here the whole day and read or paint birds if they like to do any of that. What surprised me the most is that the place was managed by the forest department and yet looked like well taken care of which I find a pretty rare thing.

Once you arrive at the park, you can choose to take a walk (11 km in total), have a cycle rickshaw drive you around or hire a cycle for yourself. Although you can go for all of three options in time if you reach early by 7 am. For one, the sun is a bit easy on you, also you can get your pick of the bike which may not be available by 10 or 11 am. There are guides available and binoculars are available on rent with rates quite easy on the pocket.

We stayed at hotels just next to the sanctuary gate as they were the best in my opinion in terms of cleanliness and safety. However, there are all kinds of hotels available on that very road. A word of caution for the ones endorsed by some of the famous travel websites. They turned out to be pretty horrible with torn bed linen, lizards and mosquitoes for a welcome. Needless to say we bailed on them for other options.

Bharatpur is a National Park and a world heritage site and so you can see a lot of foreign tourists hanging around taking pictures of the birds. We are not serious birders, but the variety of birds and the colour and detail we saw with the telescope made it a great experience for us.The most common type of birds that we came across were owl, kingfishers, painted stork, green colored pigeons, ibis, etc. Apart from that there is a ‘Salim Ali Visitor Interpretation Centre’ situated within the park, although the rickshaw wallahs seemed knowledgeable enough for a guided tour of the place as they were correctly able to spot the common as well as the migratory birds which were in large numbers and quite an attraction for their origins.

Lastly, we took the route from Delhi via the Taj expressway which made it a very convenient travel for us. However there are other routes available like landing in Jaipur airport and coming from there as it is equidistant from both Jaipur and Delhi. You might prefer Jaipur route during winters to avoid the very famous Delhi fog and since the best time to visit this place is during January and February.

All in all, it turned out be a surprisingly great experience for us and hope if you are planning to visit this place anytime in future, this blog is able to prepare you a bit for it.

Please visit this website for details:

http://www.rajasthantourism.gov.in/

Infrastructure Financing in India – Issues and Way forward (Part 2)

Contd. from Part 1….

Ok so PPP comes into the picture as the knight in shining armour saving the government from various perplexities and presenting itself as a decent solution to most of the problems. Then what is the issue now? What is it that is now going wrong! Actually, it’s quite a few things. And brace yourselves, the list is pretty long.

• The projects are not viable in the way that the quality of planning and engineering design has been found to be poor. In many cases, projects are beyond scope, contract’s terms and conditions are not standardised adding to frictional cost interaction. Also, the pre tendering phase of approvals takes forever to get over given the number of entities involved in the process.
• Construction phase have been found to lag way behind the decided schedule mainly due to overruns and dispute settlements like land acquisition delays, weak risk management techniques in place, lack of engineering skills adding to cost and time lag, etc.
• To better manage the risk arising from the construction and management of the infra project, the private company mostly executes the project via an SPV (special purpose vehicle). The impact of having an SPV of a company or its subsidiary run the project is that they do not have recourse to their parent company after initial capital has been provided and since the SPV does not have any credit history or a strong balance sheet, it impacts its ability to secure capital from outside.
• The scale of investment is extremely large and the one who has to invest has to be prepared for a very long horizon for the project to repay its debts and provide return on its equity. For many financial institutions, especially banks, their ability to finance in very long term and illiquid assets is limited due to their asset liability mismatch. Which means that banks mainly source their financing from their commercial deposits which have a tenure of 3-5 years. But the tenure of financing an infra project is 20-25 years. So to be able to provide a loan for such a long time is no easy job. Also, it adds to a bank’s liquidity risk.
• The non-recourse nature of financing the loan, as well as the unique issues entailing every project present a complex picture for the financial institutions and hence calls for great appraisal skills sets which may not be available with them yet. Also lacking in terms of skills sets is the treasury skills of the banks capable of financing these large sized loans as such skills can be useful in the risk management part where the risks arising out of such projects can be hedged is the market with the purchase of instruments having negative correlations with the risky events of the project.
• Many banks are reaching exposure limits to infra related borrowers as Indian banks are relatively small. Pension funds and insurance companies are well suited due to the long term nature of the funds available with them but they can only invest in projects with almost nil chances of default (highly rated projects of ratings AAA or AA only) which may not be the case with many of them. External commercial borrowings can be one option but till now they have constrained by caps on cost and interest rates.

 

The list can go on. But is enough for getting the entire picture so let’s just stop here and discuss on what has already been mentioned. Some of these problems are pretty complex and are being dealt with till date since inception and we are yet to have a convincing solution to them. But it will only be wise is we try and understand what’s the take of our regulatory body RBI on these issues. Some of the points explained in various speeches delivered by RBI executives over the years on these issues have been explained below:

RBI’s Opinion

• The budgetary support provided by the government of India to Infrastructure financing accounts for 45 % of the total infrastructure spending.
• Commercial banks happen to be the second largest source of finance for infrastructure. Commercial banks and in particular, the public sector banks have largely supported infrastructure requirements. The share of bank finance to infrastructure in gross bank credit has increased from 1.63% in 2001 to 13.37% in 2013.
• The gross NPA and restructured standard advances for the infrastructure sector has increased considerably and evidence suggests that a substantial portion of it is due to non-adherence to the basic appraisal standards by the bank.
• Also, creation of separate asset classification for Infrastructure projects due to rising NPAs is not seen in a positive light because of the understanding that the reason for NPAs is non-performing administration which extends to not just bank management but includes policy makers, bureaucracy, etc. and the focus should then lie on improvement of project appraisal techniques, accountability, post-disbursal supervision, etc. which is at the moment more impressionistic than information based.
• On tightening of the provision requirements upon restructuring of advances, the understanding is that provision does not mean losses and that banks should maintain provision accounts for other standard safe assets as well. Instead of restructuring only those projects which are about to turn non-performing, banks can also provide provisions to those projects which have already been marked as non-performing if some push from bank can improve the project’s state-of-affairs. Also, on restructuring, banks cut down the rate of interests charged on the loans to a great extent whereas restructuring only comes into the picture when project has become riskier than ever. It would mean that the initial rate of interest charged by the banks are arbitrary and not calculated as per the risk profile of the bank since it can make do with greatly reduced rates for a highly risky project.
• In case of asset-liability mismatch issue, bank is of the opinion that almost all banks rely on retail deposits of the tenure 1-5 years maximum to fund their advance portfolio (lending business). So the way the mismatch is managed in case of other standard loan products of tenure 8-10 years should be the same way the assets of longer duration need to be managed in the current scenario. From a long term strategy perspective, investing in the development of long tenure fixed rate product, interbank interest rate swap market for hedging interest rate risk and thus in short inculcating appropriate treasury skills may prove beneficial for the overall development of infrastructure financing.
• The idea of take out financing has been initiated and is on track wherein funds have been launched to refinance the infrastructure projects after the completion of the project upto a pre decided level and the stabilization of operations have been achieved in them. It will help the banks to exit the project in a shorter tenure and will help the project with fresh volume of lending for the completion of the project.
• Efforts are being made to resolve the issues around financing via ECB route but the understanding with RBI is that for effective management of financing these projects, ECB route may not prove to be any more beneficial than the other methods already present in the market. Motivations like arbitrage opportunities because of exchange rate differential cannot be preferred if the positions are hedged as the cost of hedging takes away the advantage. The only way a firm can potentially earn by borrowing in overseas markets is by gambling on the exchange rate and then retaining an unhedged forex exposure which of course is something which RBI does not want to encourage.

 

Some of the opinions held by RBI has been quite an eye opener for me as most of the times because of higher access to media, we get swayed by the opinions held by banks and other private sector companies involved in the infrastructure lending and borrowing process, once in a while going back to the understanding of the regulators while making a certain policy decision may be a wise idea to consider.

 

However, no matter how much we get into the discussion of which side is wrong and which one is right, one thing is very clear for everyone involved as well as the general public and it is this that we need better and improved infrastructure at any cost and no matter how difficult it looks like to bring in reforms and make the policies work, it has to be attempted if any progress is to be made in this area which quite obviously is the need of the hour. And thus we go on to discuss what are the steps which have been taken in recent past to better deal with the issues surrounding the infra sector and what has been the progress made so far because of the reforms that have been brought in.

 

Progress made so far:

 

• A CAG report states that several hectares of land acquired for special economic zones (SEZ) for public purpose were later sold off or used for other purposes. Among the groups that diverted land acquired for SEZs are Reliance Industries and Essar Steel, according to the audit report. In a report submitted to Parliament last week, CAG said the SEZs of Essar Steel in Hazira and Reliance in Jamnagar in Gujarat de-notified an area of 247.522 ha and 708.13 ha respectively, and allotted them to ineligible (DTA – domestic tariff area) units.
• Raising doubts on the fairness of allotment of government land to some top corporates for special economic zones (SEZs), the comptroller and auditor general (CAG) has said that 47 files related to them have gone missing in the commerce ministry and were not made available to the audit team despite requests.The auditor has published names of all the 47 SEZ developers who were allocated concessional government land at important locations in different cities whose files the commerce ministry has refused to share for scrutiny. The CAG audit report on performance of SEZs was recently tabled in Parliament and will now be taken up for discussion by the public accounts committee (PAC).
• After CAG picked holes in the special economic zone (SEZ) policy and questioned the underutilisation of vast tracts of land by developers, a study commissioned by the Department of Commerce has recommended going easy on new SEZ approvals. Instead, it wants to turn the focus on operationalising existing SEZs – just about half the SEZs with all approvals have at least one functional export unit inside them.
• To revive stalled plans and help banks tide over mounting bad loans, the RBI has eased norms for structuring of existing long-term project loans to infrastructure and core industries. The new guideline widens the scope of 5:25 scheme by including existing standard long-term project loans worth over Rs 500 crore to be flexibly structured and refinanced. The banks can flexibly structure the existing project loans to infrastructure and core industries projects with the option to periodically refinance them. The 5:25 scheme envisages banks to refinance or sell out their long-term project loans after every five years so that both the borrower and well as the lender doesn’t face much of an issue. For banks to avail such a facility, the loan tenor cannot be more than 25 years. The refinance may be taken up by the same lender or a set of new lenders, or combination of both, or by issue of corporate bond as refinancing debt facility. Such refinancing may repeat till the end of the fresh loan amortisation schedule.
• In a decision to speed up transfer of land for implementation of metro rail projects, the Union Cabinet has decided that once such a project is approved, all ministries would give operating rights on the relevant land sought by the metro rail company immediately.
  The decision will help avoid time and cost overruns. The proposal is to restrict ministries, departments or PSUs of the central government from asking for land in exchange for land required for the implementation of such projects.
• As many as 295 infrastructure sector projects worth Rs 150 crore or more are delayed with total cost overrun of Rs 1,01,436 crore.The original cost of the 295 delayed projects is Rs 5,48,838 crore and anticipated cost is Rs 6,50,274 crore, thus leading to a total cost overrun of Rs 1,01,436 crore.
• The National Highways Authority of India has received 167 bids for the proposed Rs 4,500-crore eastern peripheral expressway, in what could be a sign of revival of private sector interest in road projects. The proposed 135 km, six-lane expressway, which will connect Uttar Pradesh and Haryana bypassing the national capital, had no takers when bids were called in 2013 for it to be taken up on build-operate-transfer mode.
• The World Bank (WB) has offered to fund existing industrial infrastructure as well as creation of new infrastructure for micro, small and medium enterprises in Uttar Pradesh. Three sub-regional growth centres on Eastern Dedicated Freight Corridor (EDFC) have been identified by the global bank to make each industrial cluster economically viable.
• The Government of India has de-licensed the material handling equipment industry and has allowed 100 per cent FDI under the direct route. It has also given approval to some financial institutions to raise money through tax-free bonds. In the interim budget 2014-15, excise duty was cut by two per cent.
• The private sector’s share has expanded across key infrastructure segments, ranging from roads and communications to power and airports. Of the total planned infrastructure investments worth US$ 1 trillion during the 12th Five-Year Plan, the share of the private sector is estimated to be 47 per cent, up from 25 per cent during the 10th Five-Year Plan.
• India’s Planning Commission has projected an investment of US$ 1 trillion for the infrastructure sector during the 12th Five-Year Plan (2012-17).
• The Kerala State Cabinet approved a scheme for raising funds from the financial markets for infrastructure development. Funds will be mobilised for immediate, medium-term, and long-term requirements. A bill discounting system will be introduced to pay arrears, totalling around Rs.2,000 crore, to public works contractors. Instead of cash, the contractors will be issued ‘I Owe You’ instruments with irrevocable government guarantee. These could be discounted through banks. When the banks present the instrument to treasury, indication will be given as to when the payment could be drawn.
• The Karnataka government is setting up a special purpose vehicle (SPV) to develop infrastructure at tourist destinations across the state under the public-private partnership (PPP). The state cabinet approved the proposal of the tourism department to set up the SPV for tourism infrastructure development at an estimated cost of Rs.14,737 crore. 1,468 acres of land has been identified at tourist spots across the state for the projects under PPP.
• The central government has sanctioned Rs.21,350 crore for infrastructure development in the port and road sector in West Bengal
• Because of some strong projects developed in India in the last 5-10 years to boast upon, 6 Indian infrastructure projects are included in KPMG’s latest study – ‘Infrastructure 100: World Markets Report.‘ The list is incorporated based on 4 major factors, namely: mature International markets; economic powerhouses; smaller established markets; and emerging markets. They are:
  1. Delhi Metro
  2. Gujarat International Finance Tec City (GIFT)
  3. Interceptor sewage system
  4. Mundra Ultra Mega Power Plant (Mundra UMPP)
  5. Narmada canal solar
  6. Yamuna Expressway
• In the offing is the plan of redevelopment of Anand Vihar and Bijwasan railway stations as world-class infrastructure and integration of 34 metro stations into a multi-modal transportion. These decisions were approved by the DDA’s planning body UTTIPEC recently.
• The state government is all set to roll out the Rajasthan Urban Infrastructure Development Project (RUIDP) phase III with Asian Development Bank (ABD) to improve the infrastructure in six cities.In this regard, the state government has already approved the project of approximately Rs 3,660 crore. The total programme size would be US $610 million (Rs 3,660 crore). Rs 3,000 crore will be assisted by the ADB and state will have to bear the share of Rs 660 cr. In phase III, the government will improve the water distribution network, sewerage system, drainage in Sriganganagar, Hanumangarh, Jhunjhunu, Pali, Tonk and Bhilwara. DPRs and bid documents for three projects town Sriganganagar, Pali and Tonk is being prepared.

Road Ahead

So far we have been able to discuss various points of views and have also been able to review various efforts being made by the government as well as RBI to revive the sector and put it in the path of growth and development. So what is it that we may look forward to in future basis what we have in hand currently. Given the high rate of urbanization in India and a burgeoning middle class, development of infrastructure related facilities has to be in the top priority list for the government as well as the regulators. A lot of that can be seen from the way policies and efforts are being made in this sector. Also, development would mean some of the power shifting in the hands of the lower middle class as well which would mean another reason for a push in the infra sector.

The public sector is expected to continue to play an important role in building infrastructure. However, the resources needed are much larger than the public sector can provide and public investment will therefore have to be supplemented by private sector investments, in Public Private Partnership (PPP) mode. However, there is prevalence of another opinion which is that a large chunk of revenue expenditure is interest payments on past government borrowing. If the interest payment problem can be solved, there will no longer be a fiscal deficit problem and the government will have money to spend on capital expenditure or infrastructure. So, the only solution to the debt overhang of earlier borrowing is disinvestments that can be used to retire public debt and then use the money from the budget to heavily invest in Infrastructure projects.

What the need of the hour is that we have to identify our negatives such as high interest rates and inflation as well as the positives, including low labour costs and mineral resources and deal with them in a constructive way to be able to achieve the kind of growth that we as a country require currently. What can be said for sure is that there is a visible change in attitude towards investment especially in the recent times. However, to be able to say something positive with regards to flow of investments may probably take some time.

Infrastructure Financing in India – Issues and Way forward (Part 1)

So here is a blog on the current issues facing Infrastructure financing in India. I know it’s kind of a sharp turn from what I have been writing till now but as I have already mentioned in one of my previous blogs that I am after all a girl from a finance background (and it’s called Mullah ki daud masjid tak).

Lately I have been reading a lot about Infrastructure financing, the sector and what is happening in general around it. Got me to thinking about the various point of views that exist regarding what is the right way forward for the economy as a whole. It’s no brainer that India needs quality infrastructure at its disposal to support any of its developmental agendas. So if the way forward is so clear, what could be the various issues which could be acting as the barriers to a better, cleaner, organised and hence developed India? What are these points of views which are taking forever to sync?

To the ones who have already been following up on what is happening in this regard, my blog may come across as a bit layman as its basically for the ones who are not much into understanding the details of the economy and banking and stuff but if explained in easy bloggish terms may find it interesting and worth taking the pains for.

So the first and foremost question should be what exactly is infrastructure? In most simple terms it’s the basic physical structure that is needed for a society to operate or the structure required for the services and facilities necessary for an economy to function. But in common usage, the term is used to refer to physical structures like roads, bridges, tunnels, water supply, sewers, electrical grids, telecommunications, well you get the point.

But I don’t really want to talk about the infrastructure related issues of the economy. Frankly speaking, that list may go on forever and my time is precious for me. I would like to concentrate on the financing related issues with the infrastructure projects and what’s been taking so much time to get resolved for us to have bearable roads, parks, schools and other such facilities in place. After all, some of us are paying our taxes. Then why!

That takes us towards our second question. What’s financing required for and what is it really? So, that bit comes under the project financing part, which is basically financing a project based upon the projected cash flows of the project rather than the balance sheets of the sponsors/contractors. This is in sharp contrast to financing a car or a home construction (called car loans and home loans respectively) which are sanctioned when it has been confirmed via net worth documents that the owner is rich enough to pay for it. In case of infrastructure projects, the financing is done via PPP (Public-Private Partnerships) mode in India which is primarily a partnership between government and one or more private sector companies. So let’s take the obvious next question – why do we need to finance these projects like this? Why can’t the government pay for them from its own pockets?

The answer is it can’t. Two main reasons: First is that the government does not have the necessary skills or expertise to carry out these projects and the process of hiring experts and suitable engineering firms to do the job is not its cup of tea. Secondly, government is unwilling and incapable of incurring that kind of borrowing and show it in its balance sheet. The first reason is pretty straight forward to understand so let’s go deeper into the second reason. The government’s budgetary balance is a difference between the economy’s revenues and spending. Revenues are basically sourced from taxes. So, if spending is more than revenues, we have a deficit, if it’s less then we have a surplus which of course has never been the case. While some amount of deficit in an economy is seen as a mark of high demand for goods and services and thus shows good business potential, excessive deficit may create problems in terms of risks of default. Spending on infra projects comes under capital spending which is long term in nature as it cannot be renewed within a year’s time. If government does not have the resources to spend on capital expenses, then it needs to borrow funds. The most common method of borrowing is via selling government bonds (They are long term securities that pay a fixed rate of return over a long period until maturity, and are bought by financial institutions looking for a safe return).

Why is capital spending via selling bonds is not such a great idea is because as already discussed, there may be a considerable time-lag between spending and the benefits that arise from that spending, so the decision making has to be from a very long term perspective. But most importantly, excessive borrowing every year results in interest burden. In general sense, what constitutes Governments primary spending list is interest payments, defence expenditure, wages and salaries of govt. employees and various subsidies. This means that even if government doesn’t get involved in any of the activities going forward, it will still have a deficit. In order to finance this deficit, government borrows which then pushes up the interest rates (government sells bonds to banks and thus reduces banks’ surplus cash thus making commercial loans expensive) causing inflation and pushes other private sector investment to the bottom in its priority list. Since, interest burden of the past borrowed funds is already taking away such a huge chunk of the revenues, borrowing further to spend in capital expenditure is not an option for the government currently. Additionally, further borrowing translates into higher credit risk making interest rates being charged to potentially go up north further adding to the burden. Hence, PPP.

In the next sections, I will be talking about the reasons why PPP as an option got surrounded by so many controversies and complexities that despite being a perfect model given the issues with our economy, it was still unable to contribute in the desired way. Till then, happy reading…

Morals v/s Survival Instinct…

Everything is hunky dory till we come face to face with reality which hits the hardest when you are at your weakest. Recently a friend of mine did the most amazing thing (which in reality should have been the most obvious thing to do but sadly life and times hold the power to make even normal things amazing). On Saturday morning he witnessed the plight of a woman in his neighborhood in Gurgaon who was being thrashed in full public view outside her house by her in laws and her husband and was being dragged by her hairs like a luggage around the house being beaten left right and center. My friend could not tolerate it any longer and despite his mother’s opposition and a mute neighborhood silently watching the drama hiding behind their windows, he went ahead and called 100 to report the case*.

Police help did arrive and the woman was finally saved. The criminals were investigated and from the voices heard it was clear that the woman was disclosing the details of the family members and how she was threatened that if she tried to escape, her in laws will kill her father and create problems in her sister’s marriage which made her bear the atrocities being showered on her on a daily basis.

Now we may think that this is the happy ending that we all deserve, that truth won over evil and criminals paid the price for what they did. But the truth does not finish here. Soon it was discovered that the police shared the details of the phone number from which the call was made to report the case and now the criminals know who disclosed their details. They have in fact been making the rounds around his house dropping hints that they know the details and will make my friend pay for it.

Add to it the fact that they belong to a community that has been recently “awarded” the status of SC/ST and going by the way they seem to throw their weight around in public, it is not difficult to imagine that my friend might be in deep trouble now.

I am, have been and will always be a feminist at heart (and yes I don’t mind the term). So there is no doubt how proud I am for the courage my friend has shown for helping the lady at her time of need which should be the case with all of us at all times. But going by the way things are progressing, even I am forced to think if it was really the right thing to do. What if something happens to him?!?! Who is going to take care of his wife and his ailing mother? How will they ever be able to cope with the loss of their son if it ever comes to that? Should this be the price they be made to pay for having an amazing son as he is?

What is bothering me the most here is that when the Govt itself does not care – who do I make my priority to protect? This is the question faced by everyone who chooses to let people suffer and doesn’t bother to offer help. The indifference is simply an attempt to survive.

* http://gurgaon.haryanapolice.gov.in/faqs.htm: Identity is protected in case the caller demands anonymity