Lack of momentum in government spending and delay in the execution of infrastructure projects along with continuing sluggishness in the economy are likely to keep cement volume growth under check during the second half of this fiscal. Cement demand across various regions was impacted during the first half of this fiscal. Excessive rains across several States also resulted in dismal cement volumes.
According to trade estimates, the cement industry’s growth was flat during the first six months of the fiscal. The second half doesn’t hold out any hope either.
The coal ministry will auction coal blocks for commercial mining on a revenue sharing basis and proposes to announce incentives for faster production. To incentivise bidders to begin early, the government proposes to offer up to 20% deduction in its revenue share.
This will be the first auction outside the reverse bidding model since the mass cancellation of blocks by the Supreme Court. The revenue sharing model is based on recommendations of an expert committee headed by former Central Vigilance Commissioner Pratyush Sinha that was formed after the fourth and fifth rounds of auctions received a tepid response.
The ministry is soon expected to issue rules for commercial coal block auctions, a government official said.
For the automobile sector reeling from slowdown, there could be some breather from steelmakers lowering contract prices by 11-14% for the second half of FY20. Some have already sealed half-yearly contracts for the auto segment; others are in the process of finishing them.
The National Highways Authority of India (NHAI) is planning to issue land bonds to pay for acquiring land from states or other stakeholders, as part of a funding mechanism amid escalating land acquisition and compensation cost. Through this mechanism, the NHAI will not have to make upfront payments for land acquisition.
Some “cracks” have surfaced on the highways on hybrid annuity model (HAM) with smaller developers finding financial closure of projects tough, rating agency Crisil said. Launched in early 2016, the model had expedited road construction schemes and resulted in execution of a large number of projects.
The Andhra Pradesh government has amended its solar and wind power policies, effectively taking more control over setting tariffs from such power generation units. According to industry sources, the move would create further confusion in the investment environment in the renewable energy sector in the state.
Deleting older provisions, the new order mandates that the transmission and distribution charges for wheeling power would be determined by the state power regulator.