August 02, 2017
Churchill might have said it better and probably more succinctly: Centrally planned economies are the worst market models we have…. except for all the others. And there is no better example at the moment of the added stimulus that a joined up policy of coherent governmental planning can bring to an economy than India: the fastest growing large economy on the planet and a crucial, core component in Red Ribbon Asset Management’s investment strategies.
The Economic Miracle that is currently evolving on the subcontinent is, moreover, about to enter into a new paradigm through the agency of Central Government Infrastructure Planning.
Prime Minister Modi’s Government has just launched an added platform for private sector participation in Public Sector Infrastructure Programmes through a series of innovative initiatives including a dedicated Financial Institution for Big-Ticket Projects, Fast-Track Dispute Resolution and Flexible Structuring of Public-Private-Partnership (PPP) Projects. This unique, full spectrum of infrastructure support incorporates a series of protocols running from easing initial capitalization on new projects through to ensuring effective completion of existing initiatives (where Dispute Resolution Procedures have already been delivering striking early successes). Most of all though, this new range of Government initiatives will provide a solid platform for the Private and Public Sectors to work together, recognising the crucial role that infrastructure investment will have on the Indian Economy.
The India Infrastructure Finance Company (IIFCL) was set up in 2006 as a State owned vehicle charged with responsibility for channeling deployment of long term infrastructure finance into the private sector, and in the process nurturing this key partnership between the private and public sectors on the subcontinent. IIFCL’s Chief Executive, Amitabh Kant, recommitted himself last month to stepping up existing programs to identify suitable large scale projects in the future so we can expect activity levels in the PPP sector to increase.
The Indian Government is also working towards fast-track arbitration procedures so as to resolve project disputes even more effectively; and it is certainly serious about timelines for infrastructure projects, holding regular review meetings to identify bottlenecks and clear them away. Prime Minister Modi holds output based review meetings every six months and the last one took up the whole day as he grappled with the minutiae of a series of important public projects. There is no stronger signal than that of the Indian Government’s seriousness of intent in getting to grips with the daily complexities of its Infrastructure Programme. Infrastructure Investment is, of course, the key driver of any economy. In no other area of the domestic market is investment so crucial or so critical to the long-term growth of the economy and that’s what makes the current level of participation of the Indian Government in its colossal infrastructure investment programmes so encouraging. Not only is it joining up its policies, it is also driving them forward with admirable conviction.
All of which underpins the decision of Red Ribbon Asset Management to place the Indian Growth Market at the heart of its investment strategies; increasing above market returns for its investors in doing so through Mainstream Impact Investment Strategies.
Read about India’s New Dispute Resolution Programme here
Read about the Indian Public Private Partnership programme here