Business Line cited Mr E Sudhir Reddy chairman of IVRCL as saying that several regulatory changes need to be brought about to accelerate the growth of the country’s infrastructure, which is now in a state of considerable stress.
Mr Sudhir said that both by the Central Government and the Reserve Bank of India need to address issues, the latter by softening the high interest rate regime. As the Government seeks to grow the country’s economy, it is crucial for it to lay special thrust on infra sector and address its concerns.
Speaking to shareholders at the company’s twenty to fifth annual general meeting here, he assured them all out efforts are being made by the company to accelerate the growth but the market conditions continue to be tough providing little flexibility to the company and also other players in the sector.
The interest rate for instance has gone up from about 8% to 12%. This saps out all the profits a company makes. However, for all the contracts which IVRCL and other infra companies are signing at high interest rate will gain when the interest rates come down to say 9% or 10% over the next two years.
While interest rate is clearly cyclical, the current phase has been on for too long aimed at containing inflation. There are lot many issues such as environmental clearances, hurdles in implementation and delayed payments by States. All these need to be addressed by the Government on a priority basis to accelerate the sector.
