Dissertation Writing Help in Risks in Construction and Infrastructure Industry in India

Risks in Construction and Infrastructure Industry in India

Risks

Industry Risks

The Indian construction industry is relatively large in comparison to its peers; however, the sector is dominated by a handful of large players who alone posses the expertise to execute several mega-projects that are required. The sector is seeing an increasing number of international players enter; however, most have chosen to do so via a tie-in with a local company in order to help navigate the complex regulatory and operating environment. Construction companies have tended to seek joint ventures (JVs) with local  construction players, whereas private equity and other funds have chosen to take stakes in existing companies active in the infrastructure sectors, especially power. Local expertise is crucial to executing infrastructure projects in India and therefore local players - of which there are a number of substantial size - are best-placed to win contracts. India scores 55.0 for this indicator.

Country Risks

India's convoluted political and economic profile means that there are numerous country-wide risks that affect potential returns in the infrastructure sector. Among them, two key risks are India's over-burdened legal system and rampant corruption. India's legal framework is complex and archaic, with a variety of often conflicting regulations still in place. The court system is prone to lengthy delays, where even the liquidation of a bankrupt company can take up to 20 years. Meanwhile, foreign businesses have to manoeuvre through rules and certifications to obtain the estimated 70 separate approvals needed to set up shop in India (unless they are operating within a special economic zone). Environmental and land clearances also often face delays.

Corruption is another major issue of concern for investors in India, and the country is ranked 94th out of 174 countries in Transparency International's 2012 Corruption Perceptions Index. Wide-ranging administrative discretion provided by India's legendary bureaucracy provides numerous opportunities for officials to extort bribes. The lack of transparency in governance rules and excessive bureaucratic procedures provide the context for graft to prosper.

In particular, the government's procurement system has been identified as being riddled with corruption and malpractice. However, some progress has been made in combating corruption, with several public officials indicted or convicted under anti-corruption laws. According to the World Bank's Doing Business survey for 2013, India ranks a relatively low 132nd in the overall ease of doing business category, out of 185 countries. India scores 54.2 for this indicator.

Reforms in these areas are increasingly unlikely difficult for the government to push forward regulatory reforms that improve India's investment climate for infrastructure. This is due to its weakening political position and the upcoming parliamentary elections. The ruling government, the United Progressive Alliance (UPA) coalition, has been politically weakened by the withdrawal of several coalition members – namely the All-India Trinamool Congress in September 2012 and the Dravida Munnetra Kazhagam in March 2013.

Without their support, the ruling party, the Indian National Congress (INC), is forced to rely on the fickle support of smaller regional parties for policy execution. The UPA government is also constitutionally obliged to hold parliamentary elections by 2014. These two events not only increase the difficulty for the UPA to carry out market-friendly reforms, but could also push the UPA to take a more populist stance in the months preceding the elections.

If you want to write Dissertations on Construction Industry, than read case studies on Infrastructure industry and prepare literature review on risks in construction industry.  Also read Report on Infrastructure Challenges in India.