Hope emerges bright and clear amidst a dark crisis
Some of India’s leading construction and infrastructure players have expressed optimism amidst the ongoing financial crisis, while speaking to Construction Week India.
They all hold a similar view that comes with a caveat. Their opinion: Nobody will deny there’s a problem at hand, but it is too soon to sound the knell.
Rajnikant Ajmera, president, Confederation of Real Estate Associations of India, foresees resurgence because of the huge gap in demand and supply.
“Not to forget that our national economy has been growing strongly at the rate of 9% till recently.”
Although he didn’t expect the economy to continue to perform on similar lines, he assured that a growth rate of anything above 6% is good. At the recent Asia European Meeting (ASEM) in Beijing, Prime Minister Dr Manmohan Singh had said: “Our economy will grow at the rate of 7-7.5% this year despite the slowdown in export demand and capital inflows.”
Meanwhile, Ajmera is not the only one offering a positive outlook. Anand Gupta, honorary secretary (All India), Builders Association of India too is hopeful. Citing the infrastructure development undertaken by the government, he showed confidence about “demand arising for real estate options in the near future”. Mukesh Patel, MD, Neelkanth Group, agreed that the ongoing crisis has taken its toll.
“Sales have certainly been impacted. But the decision to diversify and offer a wider product basket has averted imminent losses.” Patel, who had spoken of a price correction in the market, remains hopeful of the future. “The key driver continues to be the genuine demand for quality housing options.”
A wider horizon
While the positive outlook is subdued among some real estate companies, there are some infrastructure firms who are assertive. Consolidated Construction Consortium Ltd (CCCL), chairman & CEO, R Sarabeswar, in fact went ahead and said that due to his firm’s very little engagement in the residential segment, the impact of the slowdown has been ‘negligible’ on CCCL. “We have been growing at about 45% p.a. and are confident of maintaining this rate.”
Equally confident is Subhash Sethi, vice-chairman, Subhash Projects & Marketing Ltd (SPML). After establishing its position in the water segment, SPML is rapidly expanding in the power and infrastructure segments. “These new segments are a part of our vision to become a complete infrastructure solutions provider,” Sethi said.
As the power begins to shift from developed countries to developing countries in the wake of the ongoing financial crisis, these segments could hold the key.
To recall Dr. Singh’s words at ASEM: “As a counter cyclical device, increased infrastructure investments in developing countries, if backed by resources from multilateral financial institutions such as the International Bank for Reconstruction & Development (IBRD) and regional development banks, can act as a powerful stabiliser.”
Some of the best economists, said Ajmera, are of the opinion that the real estate sector is at the bottom curve of the hockey stick and now the industry should aim at rising.
“The industry can grow provided homes remain affordable for the end-user,” he said.