Indian Economy

Resilience is what the Indian economy is best known for. The Economic Survey 2023, released by the Ministry of Finance, projects India as the fastest-growing major economy with a growth rate of 6.5-7% in FY23. As the impact of covid-19 reverberated throughout the globe, several countries prioritised infrastructure investment to help economy recovery. India also identified early that the infrastructure investment would be key to minimise the impact of COVID-19. This is due to its employment generation potential as well as backward linkage with several other core sectors. As India recovers from the lingering effects of pandemic and other geopolitical issues, infrastructure investment remains core to the Government’s economic strategy.

This emphasis on infrastructure encompasses various sectors such as roads and highways projects, metro, railway, power, water, etc. The comprehensive approach highlights the crucial role this sector play in enhancing connectivity, reducing logistics costs and power supply, all of which are essential for economic progress. Overall, the Government's strategic focus on infrastructure development, coupled with collaboration with the private sector, demonstrates a commitment to boosting economic growth and improving the overall well being of the country

Outlook:

It’s a well-known fact that India has been able to withstand the macroeconomic shocks of last 2 years better than several other major countries. According to an IMF report, the country’s contribution to global growth in 2023 is estimated at ~15%. The outlook for 2024 is similarly positive.

This growth is being powered by a massive increase in infrastructure investments, with unique schemes like PM GatiShakti, the National Infrastructure Pipeline, etc. Furthermore, the Government is keen on enhancing the capacity and efficiency of Indian industry. To that extent, multi-billion-dollar Production-Linked Incentive (PLI) schemes have been launched across various sectors. The PLI schemes aimed at manufacturing mobiles, medical devices, automobiles and auto components, pharmaceuticals, drugs, speciality steel, telecom & networking products, electronic products, white goods, food products, textile products, solar PV modules and advanced chemistry cell batteries have been received favourably by the global and Indian companies. This would not only encourage domestic manufacturing to become globally competitive but also provide a substantial source of employment generation and overall economic prosperity.

Another metric of prosperity and growth is the country’s ability to boost exports and attract foreign players into the Indian market in the form of foreign direct investments (FDI). Notably, India's construction market is on track to become the world's third-largest by 2025. In December 2022, the combined FDI inflow into the construction development sector amounted to an impressive $29 Bn, signalling a positive trend for infrastructure growth.

New Industrial Revolution

There are several fronts on which the Government is simultaneously moving. The Union Budget 2023 reflected the government’s focus on further building the Country. The allocation of ₹10 lakh Cr for infrastructure development, with a substantial increase of 33% in allocation as compared to the previous year, is equivalent to 3.3% of the estimated GDP.

As India moves towards establishing itself as a global superpower, attaining energy self-reliance is of utmost importance. Green hydrogen has the power to transform India into a major exporter of energy. India has set an ambitious target of generating 450 GW of renewable energy by 2030. Green hydrogen can play a critical role in achieving this target by enabling the storage and transport of renewable energy. By using renewable energy to produce green hydrogen, India can enhance its energy security and reduce its dependence on imported fossil fuels.

The advent of Industry 4.0, also referred to as the Fourth Industrial Revolution, has brought about a significant change sweeping across the entire planet. New age technologies are being ushered in by the convergence of cutting-edge technologies such as artificial intelligence, the Internet of Things and robots, all of which are reshaping the manner in which we work and live. As one of the major economies, India is keenly embracing Industry 4.0, putting itself in a position to lead the rest of the world into the future of manufacturing and other sectors. The Indian Government’s emphasis on digitalisation and automation is one of the primary forces propelling the country towards Industry 4.0. The Government of India has already announced the Digital India program to facilitate the faster adoption of technology.

With the Make in India and Digital India programs, we expect India’s industrial capacity to not only increase in size but also have better productivity by adopting new technologies

Sustainability

According to the IMF, global emissions must be reduced by 25-50% by 2030 compared to the pre-2019 levels to limit the temperature increase to 1.5-2 degrees Celsius. India is actively moving towards achieving a higher share of renewable energy generation while prioritising enhanced energy access, affordability and security.

Notably, the National Green Energy Mission is making significant headway with the Union Budget allocating ₹19,744 Cr in FY23. Tata Projects is fully committed to protecting the planet and keen to adopt all the tools available- Reduce, Reuse, Recycle and Renewable on its path to sustainability. Tata Projects is exploring the utilisation of green diesel by-product from the DILSAAF™ (Drop-In Liquid Sustainable Aviation Fuel and Automotive Fuel) pilot plant in Dehradun.

During the construction of Mumbai's highly complex and ambitious project, the Mumbai Trans Harbour Link, Tata Projects made focussed efforts to preserve the mangroves in the surrounding areas. This included the construction of a temporary access bridge in the intertidal zone to reduce disturbance in mangroves and mudflats. Additionally, the project also utilised state-of-the-art Reverse Circulation Drilling for piling the muck generated before it is collected and disposed of at approved locations.

As a strong proponent of nurturing biodiversity, Tata Projects has also adopted Miyawaki for urban afforestation at various project sites. This approach accelerates the creation of a natural, wild and dense forest by constructing soil, utilising native plant diversity, growing healthy saplings and planting them close together in a small area to enrich the green cover.

Tata Projects signed a MoU with the Council of Scientific and Industrial Research—Indian Institute of Petroleum (CSIR-IIP) to jointly work on clean energy solutions. The idea is to deploy clean energy solutions such as room temperature biodiesel produced by CSIR-IIP to be used across some of Tata Projects’ ongoing sites.

Tata Projects is dedicated to maintaining a secure and sustainable workplace while also preserving the environment. The company strives to enhance its safety and health practices by utilising incident data analysis, stakeholder feedback, updates to laws and regulations, and industry-leading practices to guide our efforts. It seamlessly integrates the HSE considerations into management systems and operations. By constantly searching for ways to improve, it aims to ensure a more reliable and eco-friendly future for all.

Supply Chain

Our strong and reliable supply chain system is supported by a network of trusted vendors and sub-contractors. This enables us to consistently deliver high-quality products and services to our clients and customers with confidence.

FY2023 Key Highlights:

• Tata Projects continues to consolidate our vendor pool under the strategy of ‘Deeper with Fewer’ to develop long-standing relationships and synergy with our trusted vendors.
• Aligned new vendor identification in line with Tata Affirmative Action Programme to engage persons from historically disadvantaged communities.
• Special thrust given to onboard vendors on invoice discounting platforms and other financial arrangements to improve their liquidity and cashflows.
• Started to identify and develop strategic long-term partnerships with some of vendors. This would help Tata Projects in delivering projects seamlessly with uniform quality across different locations.

Areas of Concern

Cautionary Statement

Certain statements in respect to Management Discussion and Analysis may be forward looking and are stated as required by the applicable laws and regulations. The future performance of the Company may be affected by many factors, which could be different from what the Directors envisage in terms of future performance and outlook.