Bharatmala project to be subsumed in Vision 2047 As the first phase of Bharatmala project is facing huge time and cost overruns, the government is planning to subsume the yet-to-be -awarded projects under the programme in the 2047 Vision Plan of the ministry of road transport and highways (MoRTH). The first phase of Bharatmala Pariyojana was launched in 2017 to build 34,800 km of highways at the cost of Rs 5.35 trillion by 2022. The projected cost has now risen to Rs 10.95 trillion and only 15045 km of highways of 42% of the target have been constructed. The remaining projects under Bharatmala would be made part of the Vision 2047 plan that also aims to build 50,000 km of high speed corridors. Currently the total length of high speed corridors in the country stands at 3,913 km. “The next phase of highway development will be guided by Vision 2047 which has been finalised by the ministry under which 50,000 km of access controlled highways is proposed to be constructed,” road transport and highways secretary Anurag Jain said. The Vision plan is awaiting approval of the cabinet. He said the access control will help in reducing logistics cost and also result in big savings on fuel. While developing these highways the goal would be to make them accessible at a distance of 100-125 km from any point in the country, Jain said. In October last year the Department of Expenditure had barred approval of new works and award of fresh contracts Bharatmala. under any phase until approval of the Cabinet Committee of Economic Affairs (CCEA) is received. Apart from awarding, fresh liabilities cannot be created for land acquisition and pre-construction activities under the project as per the order. This had brought the award of new highway projects, that were already slow this financial year, almost to a standstill in November. Just 221 km of highways were awarded in November which is much lower than the average 370 km per month given out for construction till October. Even 370 km length being awarded per month is much lower than last year’s average of 672 km a month last year. In April-November this year the Ministry of Road Transport and Highways (MoRTH) has awarded a length of 2,815 km up to November as compared to 5,382 km in April-November last year. As pace of award has slowed down the target for this year has been revised down to 10,000 km this year from 12,500 km. Jain said that despite the slow pace this FY the revised target would be met. Regular meetings are being held to help get to the target, he added. In April-December 6,217 km of highways were constructed as against 5,774 km in the same period of last year. Target of construction of highways has been kept at 13,814 km against the actual construction of 10,331 km last year.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.