Investment in India

Scenario of Power Sector in India

Infrastructure refers to all those services and facilities that constitute the basic support system of an economy. The development of an adequate infrastructure is essential for sustainable growth of the Indian economy. Power is one of the most important components of infrastructure that affects economic growth and well-being of nations.

India is the fifth largest electricity producing nation in the world. Power generation has grown over 100 fold since independence. The total installed capacity in India is above 1, 50,000 MW, of which majority of capabilities is with public sector companies. Only 15 per cent capacity is from the private sector, though this is now starting to increase.

The power sector is normally divided into three sub-systems:

Generation: It is done at power plants or stations that convert some form of mechanical, chemical, or nuclear energy into electrical energy.

Transmission: It is the process of transferring the generated power to a distribution system.

Distribution: It is the final stage in the delivery of electricity to end users. It involves providing the transmitted power to individual homes, commercial areas, etc.

Growth and Performance

The Indian Ministry of Power has set a goal, “Mission 2012: Power for all”. Along with providing cent per cent access to electricity, the main aim is to provide reliable and good quality power to enhance commercial feasibility.

Due to rapid urbanisation and industrialisation, there is a huge demand for power in India. This creates enormous opportunities for private players because of high energy shortage. Government is inviting private investment in power infrastructure in India by providing various incentives to set up power plants, according to research report of Indian Power Sector Analysis.

A massive capital investment of around US$ 200 billion is required to meet Mission 2012 targets. The Indian electricity sector, will add nearly 45,000 megawatt (MW) to its total installed capacity by 2013-14, to the existing production, according to a RNCOS research report. This has welcomed several global companies to establish their operations in India under the public-private partnership programs.

Investment Policy

Government of India has initiated several reform measures to create a favourable environment for investment in the country. Some of the measures are:

• There is no requirement of licenses to set up new power plants in India. According to the Ministry of Power, 100 per cent FDI is permitted in generation, transmission and distribution system of power sector in India.
• Indian Government provides income tax holiday for a block of 10 years in the first 15 years of operation and waiver of capital goods' import duties on mega power projects (above 1,000 MW generation capacities).
• Power procurement is permitted through a transparent bidding process. There is no customs duty on the import of capital goods for mega power projects.
• The Government of India has also constituted independent regulatory commissions in 22 states, so that each State has its own electricity regulatory commission. Distribution reforms have been initiated with distribution being privatised in few states like Mumbai, Orissa and Delhi.

Infrastructure in India and its Varied Opportunities

The Infrastructure for India can be based on power and electricity and it is a common knowledge that these infrastructures needs serious built ups, the service sector has taken a leap into excellence and is inviting more and more clients from abroad to set up their customer service industry in the Indian market. The transport is another sector and the labor migration and security all are different sectors that need to be explored a little more so that they can bring in more prosperity for the market. The infrastructures can be improved by more planning on each side and sector and then investing on them so that they grow.

The labor cost are lower in India than its competitors and the hence there is no shortage for cheap labor. The fresh stream of air in the industries can be brought as incentives from different governmental bodies and public sectors. There are various Investment Opportunities for the Indian market as it is a source for raw materials and there is the modern work forces that bear a better communication skill that can bring in the changes. The investment can be made by investors who are looking for different ways to earn profit.

This democracy is one of the largest in the world and hence it has become a top resource for the countries worldwide and developed the growing opportunity for different Infrastructure for India for different manufacturing units. The deposit of natural resources like iron ore, coal, titanium ore, petroleum, mica, limestone, dolomite and many other such ores give India a lot of opportunities to channelize its resources. The area that is covered by forest is also vast and therefore can be tapped for other resources like the flora and the fauna and the different rare timber and vegetation.

The Indian economy has traditional farming by using modern agriculture. It has a chunk of workers who work on handicrafts that are done by using bare hands and small machines propelled by hand. The Investment Opportunities will be seen with the large industries like the large machine driven manufacturing units and service units. The food producing units cater to the food for the people all over the world. The industry based on production of sugarcane, rice and tea have also grown to a great extent and there are also the products from milk, fruits and vegetables ruling the market and these can compete well in the global market.

This is a land of diverse economy and varied resources. The Infrastructure for India does comprise of areas that have not been tapped properly as yet and other side shows us sectors that has grown and has brought in economic restructuring for the country. The industry that introduced Foreign Direct Investment are the service sectors, fuels and chemicals, the area for electrical equipment and the construction industry and the telecommunication industry. The drug and food processing are other areas that have grown and the recent growth has been seen in the outsourcing industry. India still has areas that has huge potential and not yet been tapped and they can help the Indian states and the country gain prosperity as a whole.

How to Gain Best From Infrastructure in India

A good set of infrastructures is a must requirement in making a country stand best. These are essential prerequisites to help a country flourish systematically. The Indian government has realized this perfectly and they are trying best to put things in order. Proper roads, steady telecommunication, perfect water supply, effective power grids and the like are constantly being established and renovated to make things smooth for investors both within and outside the nation. India is a good sector for international investment – this fact can only be proved with a definite economic infrastructure planning.

To attract better investment opportunities in India it is unlikely to have real means of growth. When foreign investing companies will have difficulty in spreading out they would be bound to think twice before making an investment. Thus, you have to think about the improvement of all major sectors like irrigation, electricity, gas pipeline and telecommunications to help reach the effects of developing nation reach to the interiors of the land. However, there should not be any sort of disparity between what has been actually planned in economics and the genre of actual financing.

To merge the gaps well and come up with an effective infrastructure in India it is essential for you to keep these points in mind. Firstly, much strength should be applied in the corporate bond market. When the bonds are strong you would be able to invest without doubts and difficulties. You must also make sure to allow insurance companies to come to the scene. This would help you arrange for that extra fund in business and for setting up better infrastructures. It would also be wise to welcome foreign investors for making a capital investment for the fast development of the infrastructures.

A good network of transportation in India has made good scopes for investment opportunities in India. This includes all, coastal shipping, road, rail, air transportation and other effective means of communication. The domestic sections of Indian market are greatly benefitted for having well-constructed roads in all parts of the country including both rural and urban areas. In fact, the connection between economic growth and effective infrastructure is always there. If you cannot connect or reach well how you would make the perfect use of your inventories – this is an important question to be asked.

It is required to have the best infrastructure in India to take economic growth to heights. The progress is slow but gradually things are really getting to their right places. Now, the world is beaming with new technicalities and for India to absorb the bests from these techno sources it is essential for the proper layout of the infrastructures. According to the reports as stated by UNCTAD, India is identified as one of the most attractive location where you can invest with the mind to get the best out of the place. Lots of infrastructure improvements have already been made and some more are still waiting in queue to make a mark globally.