CRISIL today launched the CRISIL InfraInvex, India’s first investability index that tracks, measures and assesses the development, maturity and investment attractiveness of infrastructure sectors, along with the CRISIL Infrastructure Yearbook 2017, a first-of-its-kind annual publication.
 

For years now, the government has been doing the heavy lifting in terms of infrastructure investments. However, having only the public investment cylinder firing is not good enough. Accelerating private sector investments is an essential complementarity, and the other cylinder that needs to fire.

The CRISIL Infrastructure Yearbook 2017 underlines this aspect, and says India needs to spend at least Rs 50 lakh crore between fiscals 2018 and 2022 to build out its infrastructure sustainably.

“India will see close to Rs 3,000 crore investment per day in Infrastructure sector, and 56% more than the Rs 37 lakh crore projected spend between fiscals 2013 and 2017,” said Ashu Suyash, Managing Director & CEO, CRISIL Ltd. “Spending of such magnitude requires expeditious resolution of the problem of stressed assets in banking, front-ending of bankable projects, comprehensive re-tooling of public-private partnership frameworks, and deepening of the infrastructure financing ecosystem, which is of tremendous importance.”

Given the context, CRISIL felt a holistic investability index that tracks all the nuances of the infrastructure sector would be of immense value because it will inform stakeholders, guide interventions and ultimately draw more investments and investors.

The CRISIL InfraInvex is based on four pillars – policy direction, institutional strength and regulatory maturity, financial sustainability, and implementation ease. Being an ascending scale, a score of 1 reflects least investment attractiveness and maturity, and a score of 10 highest investment attractiveness and maturity.

“The CRISIL InfraInvex scores for 2017 show that the power transmission sector in India is the most attractive to invest in currently, followed by roads & highways, and renewable energy,” said Sameer Bhatia, President, CRISIL Infrastructure Advisory. “Thermal generation, power distribution and railways need a lot of facilitation before they can draw big money. The urban sector, which is the least attractive right now, also needs a lot of attention.”

The CRISIL Infrastructure Yearbook 2017 highlights the key drivers and drags for each sector, and underlines the priorities to address the challenges. If implemented well, these would lead to improved CRISIL InfraInvex scores next year, and will have a positive rub-off at the macro-economic level, too.

The yearbook acknowledges that the government has been doing the heavy lifting in terms of infrastructure investments for years now.

However, it says having only the public investment cylinder firing is not enough. Accelerating private-sector investments is an essential complementarity, and the other cylinder that needs to fire. That requires a deepening of the capital market and facilitating greater access to funding.

Given this, the yearbook recommends some steps to strengthen the foundations of infrastructure development in India. These are:

• Resolution of the twin balance-sheet problem in the near-term
• Accelerated and broad-based adoption of technology, particularly to make infrastructure accessible to citizens and create last-mile impact, and,
  
• Institutionalising innovations that afford greater access to capital market financing