Expansion of National Highway by 25,000 kilometers will greatly increase the business especially for Road Construction Equipment sector.
Anand Sundaresan Managing Director, Ammann India As the government aspires to grow Indian economy to $5 trillion by 2025, how do you look at the Union Budget 2022 – 23 unlocking opportunities for India’s CE industry? The budget is
– Anand Sundaresan
Managing Director, Ammann India
As the government aspires to grow Indian economy to $5 trillion by 2025, how do you look at the Union Budget 2022 – 23 unlocking opportunities for India’s CE industry?
The budget is a investment oriented budget which will drive infrastructure development. With over 35% increase in capex outlay for infrastructure development which covers road building, river-linking projects, investment in Railways, housing etc. and the PM Gati Shakti Master Plan for express ways for faster movement by roads is expected to increase the road construction activity. With all these initiatives the construction equipment will be hugely benefited.
How do you think this budget will help in pushing investments in the infrastructure, construction and mining space especially after a stagnant period of the Covid-19 pandemic?
As mentioned above, many infrastructure construction projects has been announced in this budget. Last couple of years has been very challenging for construction equipment industry. It is sincerely hoped that all the projects announced will be implemented at the earliest, which will help the CE Industry.
The budget points out many initiatives like PPP projects, significant support to the State to revive capex by State Government, use of surety bonds from Insurance as a substitute for bank guarantee, speedy dispute resolutions etc. will help in infrastructure development.
The finance Minister, in her budget speech, has stated that National highways in India will be expanded by 25,000 km during 2022-23. What is the impact of this on the CE sector in terms of skilled employment as well as from business generation?
Undoubtedly, expansion of National Highway by 25,000 kilometers will greatly increase the business especially for Road Construction Equipment sector. With regard to skilled employment, this is a challenge. The Infrastructure Equipment Skill Council promoted by ICEMA has been skilling about 25,000 – 30,000 operators per year. Unfortunately, this has come down to less than 5,000 during the Covid period. We have to necessarily put trust on skilling more people so that skilled employees are available for handling sophisticated equipment deployed in the construction activity. We seek help of our customers to deploy their operators to IESC accredited training centers for getting them trained.
What do you think are the present challenges and the road ahead for CE industry?
There are many challenges CE Industry is facing. Few of them are the substantial increase in input cost. For example: Steel price increase, increase the cost due to changeover from BS3 to BS4. This has huge cost impact which has made the construction equipment very expensive. Supply chain issues and non-availability of long lead time of certain critical components which goes into the construction equipment is another challenge. Having said that as far as India is concern, the infrastructure development will continue. Thus, the CE industry has a very good future and it will continue to flourish for the next many decades. Of course, with intermittent ups & downs, which is a part of any developing economy.
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