Moves on multiple fronts to improve infrastructure

Matching the speed of economic growth, the government has made infrastructure development a priority. It has taken legislative and policy initiatives to promote growth in the infrastructure sector, and the allocation of about US$82.48 billion to the sector in the Union Budget for 2018-19 is reflective of its resolve.

In 2017, the sector recorded 91 M&A deals valued around US$5.4 billion. As per present estimates, this number has been surpassed in the first half of 2018 alone. Power and roads have been the focus of deal activity.

Policy initiatives: The government has introduced various sector-specific policies to boost investment. In 2015, it allowed easier exit options for developers of road projects, and they are now permitted to divest up to 100% of their equity after two years from completion of construction. Debt-laden developers have thus been able to monetize assets, and this has given a push to the M&A activity.

Venkatesh Prasad is a partner at in the Gurugram office of J. Sagar Associates. His views are personal.