Agarwal wants a vibrant leasing environment
India is set to witness the construction of around 220 million km of roads in the near future linking all the major ports of India, said Gen. (Dr.) V. K. Singh, Minister of State, Ministry of Road Transport and Highways.
“Road transport which is the fastest mode of transport would be made cost-effective due to the same,” he assured.
Meanwhile, work has started on the Delhi-Amritsar link while construction is in full swing on the Delhi-Mumbai-Vadodara work, he told the Global Virtual Summit 2020 – Leasing and Hire Purchase: Procuring Assets @ Ease of Finance” on 19 Sept 2020. It was organised by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“This would reduce the travel time to just around 3-3.5 hours between Delhi and Amritsar by road.”
He further explained that the government is keen on increasing connectivity between Uttarakhand and Delhi so the work on Dehradun-Delhi road connectivity will start soon. “This would reduce the travel time to just around 2.5- 3 hours between these two places,” he pointed out.
Dr. Singh explained that due to digitalisation and new technology coming in, the government would be able to monetise a lot more.
“We are expecting around Rs.1 lakh crore to come from toll collection in the next five years, the same would be utilised in creating more roads,” he said.
Giving the example of the London Bus Transport model, he also stated that the public transport system needs to take lead from them by following their Leasing and Hire Purchase model.
“In London, buses are operated on lease where a certain part of the profits are shared with the bus owner. The system is working fine as it benefits everyone,” he said.
“Leasing as a concept which is not yet popularised in India and ASSOCHAM needs to take this forward to educate people”, said Dr. Singh.
Dr Singh expressed his satisfaction that the infrastructure development work which had witnessed some slowdown on account of the COVID-19 situation has come back to the earlier level.
These are challenging times for all sectors and making capital investments has become all the more difficult, added Vineet Agarwal, Senior vice president, ASSOCHAM, and managing director of TCI Group.
“In this changed scenario, the option of leasing has become more attractive as compared to the past as it reduces capital cost and helps in asset creation at such a difficult time,” said Agarwal.
He mentioned that the introduction of Goods And Services Tax (GST) has helped in giving assurance to the companies in leasing as they can apply for input credit to offset certain costs.
“Though the leasing segment has found its space during the pandemic, there are certain irritants that need to be addressed by the government such as the tedious paperwork that is involved in the hiring and leasing segment,” said Agarwal.
“Digitization of all the paperwork and allowing e-signature are some of the plausible solutions that we should look at,” he explained.
Stating that leasing In India is at the infant stage currently, efforts should be made by the government to encourage a vibrant leasing environment in the country, he added.
The Bharatmala Pariyojana is expected to bring a paradigm change in the road transport sector, added Dr. Niranjan Hiranandani, President, ASSOCHAM, and co-founder & managing director of Hiranandani Group.
“The project is expected to connect around 550 districts in the country. The total road construction in this project would be 66,100 km. This would reduce the travel time by at least 25 percent and bring down the supply chain cost by 5-6 percent,” he said.
He explained that the GST simplified the taxation policy for the leasing sector. “Earlier there were a lot of barriers in the way for the leasing sector but with the introduction of GST, it removed most of the barriers,” he pointed out.
Dr. Hiranandani added that any country that is in recession needs inputs from roads, housing and infrastructure sectors to deal with the situation. “Leasing is a model that will work like a paradigm in terms of funding where financials are the concern,” he explained.
He stated that the BOT (Build, operate, and transfer) model to raise funds is a step in the right direction and should be encouraged to build infrastructure. #roads #highways #leasing #banks #infrastructure #tenders #projects /fiinews.com
