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Economic recovery to drive road traffic up 12-14% this fiscal

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Traffic

Road traffic volume will grow 12-14 per cent in the current fiscal, driven by economic recovery, continued industrial production, and increased preference for personal mobility fuelled by the pandemic, after declining 4-5 per cent in the last one year.

Resilient performance of the sector through the pandemic and adequate liquidity maintained by players would continue to support their credit profiles, a CRISIL Ratings study of 25 toll road assets across 11 states indicates.

Says Anuj Sethi, Senior Director, CRISIL Ratings, “Road traffic grew 57 per cent on-year in the first quarter this fiscal, albeit on a significantly contracted base of last fiscal, which saw more stringent restrictions. The bounce-back has been faster compared with the first wave, with normalcy returning in July as against September last fiscal. Consequently, traffic growth is likely to be healthy at 12-14 on-year.”

Commercial traffic, which is closely linked to the macroeconomic environment, is expected to log healthy growth this fiscal. Personal mobility, on the other hand, is likely to gain preference over public transport or shared mobility due to pandemic-related concerns, thereby driving passenger traffic.

With both these growth engines expected to fire, the sector’s growth prospects look brighter.

CRISIL’s base-case estimate, though, factors a modest impact of a possible third wave, and could see a downside of 200 basis points (bps) if it is more severe than anticipated.

The sector faced multiple headwinds over the last 2-3 fiscals, with revision in axle-load norms of commercial vehicles, economic slowdown and the pandemic affecting traffic.

To be sure, the sector remained resilient through the pandemic. A strict nationwide lockdown and restrictions on industrial activity disrupted traffic well into the second quarter of last fiscal.

However, once restrictions eased, there was a healthy bounce-back, limiting the decline in traffic to a better-than-expected 4-5 per cent last fiscal. This fiscal has seen a much stronger bounce-back after the second wave-induced restrictions in the first quarter.

While traffic in north, east and central regions remained fairly resilient due to lower caseload and thereby a faster relaxation of movement restrictions, the more industrialised southern and western states saw a comparatively sharper decline due to more stringent restrictions and slower recovery.

Says Anand Kulkarni, Director, CRISIL Ratings, “The credit profiles of players in the road sector are expected to remain strong, and their debt-servicing ability has not deteriorated due to the pandemic-related disruptions. Average debt service coverage ratio of the CRISIL Ratings sample is likely to be healthy at around 1.9x this fiscal, similar to our pre-pandemic estimates, after contracting by a modest 0.3-0.5x last fiscal. Additionally, adequate liquidity maintained by these players (debt service reserve of 3-6 months) would support their credit profiles.”

Healthy performance will continue to support investor activity in the sector, and CRISIL Ratings foresees strong monetisation potential in the sector through infrastructure investment trusts, private sales and toll-operate-transfer modes.

That said, an intense third wave impacting economic activity could moderate the sector outlook and will bear watching.

International

Man shot in targeted attack in Australian state of Queensland

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Sydney, June 6: A man has been hospitalised with serious injuries following a targeted shooting in the Australian state of Queensland.

The Queensland Police Service said on Friday that emergency services were deployed to a house in Parkwood, 65 kilometres southeast of Brisbane, around 7:50 p.m. on Thursday in response to reports that a man had sustained gunshot wounds to his leg and other injuries to his hand.

The 21-year-old man was found at the scene with serious injuries and was transported to the hospital in stable condition, Xinhua news agency reported.

A police statement said that initial inquiries indicated that the incident was a targeted shooting and that there was no ongoing threat to the public.

An investigation into the attack was ongoing and police commenced a search for the perpetrator.

In a separate incident, Australian police are investigating a fatal stabbing in a remote outback mining town west of Sydney.

Emergency services were called to conduct a welfare check at a home in Broken Hill, over 900 kilometers from Sydney in the far west outback of the state of New South Wales (NSW), just after 11:50 p.m. on Thursday.

Police officers arrived at the scene where they found a man, believed to be aged in his 40s, with stab wounds to his neck.

He was treated by ambulance paramedics but could not be revived and was declared deceased.

Local police established a crime scene at the house and have commenced an investigation into the man’s death with assistance from the NSW Homicide Squad.

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National

Kerala Guv upset after Minister skips event displaying Bharat Mata’s portrait

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Thiruvananthapuram, June 6: Reacting to the controversy after the Kerala Agriculture Minister P. Prasad boycotted the state-level celebrations on the World Environment Day at the Raj Bhavan — the official residence of the state Governor, Rajendra V. Arlekar, the latter expressed his displeasure.

Speaking at the event as the state Governor, Arlekar expressed his displeasure by saying that the Agriculture Minister should also have been present here.

“The State Education Minister informed that he could not come. Then the Agriculture Minister also did not come. I do not know what better issues we have, the Agriculture Minister wanted to remove the portrait of Bharat Mata from the dais,” said Governor Arlekar.

“I told them that we will do everything else, but we cannot remove Bharat Mata’s portrait as this is what we are living for and probably that’s the reason why they did not come,” he added.

“What sort of thinking we have in our minds,” lamented Governor Arlekar.

The reason was that the State Agriculture Minister did not want the portrait of the Bharat Mata, commonly used by the Rashtriya Swayamsevak Sangh (RSS), to be placed on the central dais.

Minister Prasad told the media that the programme was decided after speaking to the Governor.

“Last night, a change was made, and this was not acceptable to the state government. The picture was not the regular Bharat Mata picture which we use, but at the Raj Bhavan, it was the one that is used by the RSS. It is not right to keep such pictures, and the Governor said it cannot be changed, and hence the state government decided not to take part in the event at the Raj Bhavan,” he said.

“This is an unconstitutional thing. It is only after this Governor took over that there have been such changes. We have the highest regard and respect towards the normal Bharat Mata picture, but not the one used by the RSS,” Prasad added.

Incidentally, on Tuesday evening, officials from the concerned Minister’s office were at the Raj Bhavan for an inspection of the Central Hall, where the picture of Bharat Mata was kept.

Later, the officials who visited the Raj Bhavan told the Minister about the picture. Following this, the Minister spoke to Chief Minister Pinarayi Vijayan, and later, the decision was taken that Minister Prasad would not attend the meeting.

The Minister called the Raj Bhavan and told that he would not be able to attend the event if the picture of Bharat Mata used by the RSS was not removed.

However, Governor Arlekar stood his ground and said that the picture of Bharat Mata would not be removed.

Later, the state government decided to hold a function in the Durbar Hall of the State Secretariat to mark the World Environment Day celebrations.

The Kerala Chief Secretary, A. Jayathilak, was directed to organise a separate event.

Prior to this event, on Thursday, there were two different state-level functions — one chaired by Governor Arlekar at the Raj Bhavan and the other in the Durbar Hall with Minister Prasad presiding over.

Prasad, a first-time legislator, is a member of the Commmunist Party Of India (CPI).

Former Kerala Minister and State CPI Secretary, Binoy Viswam, said this was unacceptable, as the picture of Bharat Mata used by the RSS should not be displayed at a state function.

Incidentally, last month, Governor Arlekar had invited prominent RSS ideologue S. Gurumurthy for a talk after the successful Operation Sindoor, and Chief Minister Vijayan had said that it was wrong to convert the Raj Bhavan into a place for the RSS.

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Business

EAM Jaishankar lays out three objectives to bolster India-Central Asia trade ties

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New Delhi, June 6: External Affairs Minister (EAM) S. Jaishankar has urged the India-Central Asia Business Council to recommend a roadmap for further deepening of India-Central Asia ties in trade, economic and investment.

Addressing the Business Council meeting in the national capital, EAM Jaishankar highlighted three broad objectives for strengthening the economic partnership — deepen existing cooperation, diversify the trade basket and introduce sustainability and predictability in economic interactions.

“One, is to deepen the existing cooperation both in terms of volume and in terms of quality. There is already I think a recognition in each others countries and each others economies of the players and of the products. But, we must build further on that foundation and a very good example here is actually the pharmaceutical sector,” he told the gathering.

“Two, we need to diversify our trade baskets so that all of us have more options and we have more competition and in a way we are looking for new opportunities. I would like our friends from central Asian economies to appreciate that an economy today which is in excess of $4 trillion, which is growing at 6-8 per cent annually, it will create new demands for products, for services and even I would say in a way new demands out of more prosperous lifestyles,” EAM Jaishankar emphasised.

He also stressed on the need to introduce greater sustainability and more predictability in economic interactions.

“That means more long-term contracts and arrangements, cross investments, joint ventures and certainly sectors like energy whether we are talking uranium, whether we are talking crude oil even potentially gas, whether we are looking at mining, If you are talking about coal or if you are discussing fertilizers, I think these are all relevant examples to reach really long term understatings between us,” the foreign minister highlighted.

India’s trade and economic ties with Central Asia over the last decade have shown a very strong positive trend. Mutual trade was less than $500 million a decade ago in 2014.

Today, “what we have collectively is actually a trade volume which is almost touching $2 billion. However, this figure does not reflect the full potential. The need to address this is today even more urgent because of the uncertainties of the international economy and this requires governments and businesses to work together in tandem, which is why all of us are here in this room,” EAM Jaishankar noted.

He also laid out five solutions to further bolster the India-Central Asia economic ties: Digital Economy and Innovation, Financial Services, Healthcare and Pharma, improving connectivity and streamlining Transit Procedures.

“In addition to all of this, I think you would agree that tourism, education, films, and cultural exchanges, these are all important, they should be tapped for their economic and business potential,” he mentioned.

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