నమోదిత కంపెనీల్లో ఛైర్మన్‌, మేనేజింగ్‌ డైరెక్టర్‌(ఎండీ) పదవులను విడదీయాలన్న నిబంధనల అమలును సెబీ రెండేళ్ల పాటు వాయిదా వేసింది. కార్పొరేట్ల నుంచి వచ్చిన విజ్ఞప్తులతో పాటు ప్రస్తుత ఆర్థిక పరిస్థితుల నేపథ్యంలో ఈ నిర్ణయం తీసుకున్నట్లు తెలుస్తోంది. సెబీ నిబంధనల ప్రకారం.. అగ్రగామి 500 నమోదిత కంపెనీలు 2020 ఏప్రిల్‌ 1 నుంచి ఛైర్మన్‌, మేనేజింగ్‌ డైరెక్టర్‌ లేదా చీఫ్‌ ఎగ్జిక్యూటివ్‌ ఆఫీసర్‌(సీఈఓ) పదవులను విడదీయాలి. సీఎండీ పేరిట ఒకరే నిర్వహించరాదు. ఇలా ఆ పదవులను విడదీయడం ద్వారా కార్పొరేట్‌ పాలనా ప్రమాణాలు మెరుగుపరచాలన్నది సెబీ ఉద్దేశం. ఈ నిబంధన అమలు తేదీని 2022 ఏప్రిల్‌ 1కి వాయిదా వేస్తున్నట్లు జనవరి 10న విడుదలైన ఒక నోటిఫికేషన్‌ వెల్లడించింది. ఈ వాయిదాకు సెబీ ఎటువంటి కారణం తెలుపలేదు.
వినతుల నేపథ్యంలో..
నమోదిత కంపెనీలు ఈ నిబంధనలను పాటించడానికి ఇంకాస్త సమయం కావాలని ఫిక్కీ, సీఐఐ వంటి పరిశ్రమ సంఘాల నుంచి సెబీకి వినతులు వెల్లినట్లు తెలుస్తోంది. స్టాక్‌ ఎక్స్ఛేంజీల దగ్గర ఉన్న సమాచారం ప్రకారం.. ప్రస్తుతం అగ్రగామి 500 నమోదిత కంపెనీల్లో 50 శాతం మాత్రమే ఈ నిబంధన పాటించినట్లు తెలుస్తోంది. ప్రస్తుతం చాలా కంపెనీలు రెండు పదవులను సీఎండీగా విలీనం చేయడంతో బోర్డు, మేనేజ్‌మెంట్‌లో ఒకే వ్యక్తి రెండు విధాలా వ్యవహరించాల్సి వస్తోంది. ఇది వాటాదార్ల ప్రయోజనాలకు ఇబ్బందని భావించిన సెబీ ఆ పదవిని విభజించనున్నట్లు మే 2018న ప్రకటించింది. కాగా, రిలయన్స్‌ ఇండస్ట్రీస్‌, బీపీసీఎల్‌, ఓఎన్‌జీసీ, కోల్‌ ఇండియా, విప్రో, హీరో మోటోకార్ప్‌ వంటి దిగ్గజ కంపెనీల్లో ఛైర్మన్‌, మేనేజింగ్‌ డైరెక్టర్‌ పదవులను ఒకే వ్యక్తి నిర్వహిస్తున్నారు.
Intro:Body:
Hyderabad: It would be prudent to moderate expectations in the light of past three-years growth performance. On the last day of 2019, a year in which growth fell steeply each quarter, the government announced Rs 102.51 trillion infrastructure investment plan for the next five years. This intervention comes amidst a sustained drop in growth for three years to March 2020.
Real GDP growth has been losing momentum from its 8.2% high in 2016-17 to 7.2% the next year and 6.8% last year; and now, an alarming 1.8 percentage point fall to 5% is anticipated in this year. Without doubt, the government is under tremendous pressure to stem this slide.
To combat this, it intends ramping up investments in roads, power, housing, irrigation, and other such infrastructures. This is also critical for achieving the impressive goal of a $5 trillion economy by 2025 that the Prime Minister announced last year.
Will the infrastructure boost inspire a virtuous cycle of higher investments, growth and employment?
Public infrastructure spending has been a popular answer in several countries in economically difficult times. A recent example is South Korea, a trade-reliant country whose exports suffered severe setbacks last year due to supply-chain disruptions caused by US-China tensions, prompting the economy to slow down.
Its President Moon Jae-in recently announced a $51 billion plan for developing public infrastructure to boost employment and private sector activity. Such public investments are believed to create fresh demand opportunities, attract private enterprise and stimulate economic activity, thereby uplifting aggregate demand - a process known as the multiplier effect that is underpinned by Keynesian economic theory.
In this light, there’s little fault to find with India’s infrastructure plan which comes amidst an 11-year low downturn in growth with uncertain future outlook – many are unsure if growth has bottomed or could fall even lower ahead. The infrastructure investment will be frontloaded.
The government proposes to increase this most, by Rs 6.2 trillion, to Rs 19.5 trillion next year followed by Rs 19 trillion in 2021-22; it will moderate thereafter to a respective Rs 13.5, 12.5 and 11 trillion in the three years to 2024-25. About two-fifths, or 80%, will be invested in roads, urban and housing, railways, power and irrigation sectors.
Government (centre and states) will bear 78% of the risk, to be divided equally, while private sector participation is 22%. The NIP (National Infrastructure Pipeline) lists the feasible and viable infrastructure projects for implementation in 2020-2025; quite some are already under implementation.
How does this boost compare with similar spending in past five years?
It is well known that Modi-I government invested significantly in roads, highways, housing, urban, digital and other infrastructures in its previous tenure, i.e. from 2014-15. As per data put out by NIP report, the central government increased is expenditure 2.3 times to Rs 3.9 trillion in 2017- 18; as share of GDP, the rise was from 1.4% to 2.3% in this period. Last year or 2018-19, central government infrastructure spend was Rs 3.8 trillion.
Against this, the central government’s capital outlay under NIP is projected Rs 4.6 trillion next year, 24% of the total investment (Rs 19.5 trillion) planned for 2020-21. The centre’s incremental spending is below Rs 1 trillion in next two years; its share increases in the tail years of FY24 and FY25.
Whereas the states will invest the bulk shares in the first three years.
From a demand-boost perspective, i.e. the stance adopted by central government who is responsible for framing macroeconomic policies – fiscal policy in this instance – what can be expected?
Here, the preceding five year experience is not so encouraging. Total infrastructure investment in India rose from Rs 6.3 trillion in 2013-14 to Rs 10 trillion last two years (2017- 19). The latter increase came mostly from the near-doubling of central government spending, whose infrastructure investments rose to Rs 4 trillion the last two years; its share of total investment catapulted 13 percentage points to 38% from below-25% in first three years of Modi-I.
What have growth outcomes been like? Unfortunately the reverse of that anticipated! Real GDP growth, as mentioned above, slowed in 2017-18, slipped down further in 2018-19, and expected falling severely this year to 5% or even less according to several estimates. If we look at employment, the NSSO’s Periodic Labour Force Survey, 2017-18 (this was initially withheld and released only end-May 2019) showed unemployment rate at a four-decade high, 6.1% in 2017-18. Private statistical agency CMIE’s estimates are quite similar.
The mood, reflected in the confidence of businesses and consumers sentiments, on which spending decisions are made, has fallen down to one of its lowest levels. Export growth, a measure of international competitiveness, is seen contracting 2% this year; manufacturing growth is 5 percentage points lower. The latter trend must be seen in the light of NIP’s additional goal, which is to improve India’s competitiveness too, especially in manufacturing.
This performance is not encouraging. Reasons about the adverse outcome could be many, e.g. elevated and unresolved bad loans, banks’ retreat from lending, the NBFC crisis and resulting credit crunch, corporate indebtedness restricting private risk-appetite, and so on. Perhaps these subdued the multiplier, restraining anticipated effects upon investments, employment and incomes.
On the other hand, the counterfactual scenario cannot be overlooked. Might growth have been even lower minus the infrastructure investment support? Such projects are believed to have a 60-80% construction component. Construction sector is one of India’s topmost employment generators; its pace has slowed very sharply to just 3.2% this year as per advance GDP data released on January 7; it grew 8.7% a year ago. Without the infrastructure investments of 2017-19, the slowdown in construction may have been more pronounced perhaps.
This mixed picture of growth performance in relation to stepped-up infrastructure investments, i.e. the boost mitigated or averted an even sharper deceleration, should temper expectations from this fresh round of infrastructure investment stimulus. The concluding consolation might be that without this injection, growth might slip down even further ahead.
(Article by Renu Kohli. She is a New Delhi based macroeconomist)
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