Infra Projects Could Have Four Times Multiplier Effect, Says SBI Chairman
Government announced Vadhvan port and 1GW offshore wind energy projects. This gives 'a lot of encouragement to all the core sectors of the industry, be it cement, steel, or iron ore', he said
Large infrastructure projects could have "large multiplier effects, as high as four times" on the economy, said State Bank of India Chairman Dinesh Kumar Khara, a day after the Union Cabinet announced its big bang project drive.
On Wednesday, the cabinet greenlit Rs 76,000 crore worth all-weather Vadhvan Port in Maharashtra and Rs 7,400 crore worth viability gap funding for 1 gigawatt offshore wind energy projects in Gujarat and Tamil Nadu. Alongside, the cabinet also announced the Lal Bahadur Shastri International airport at Varanasi.
"Needless to mention, it gives a lot of encouragement to all the core sectors of the industry ... be it cement, steel, or iron ore. On top of that, it will declog logistics," Khara told NDTV Profit in an exclusive interview.
The offshore wind energy project, which is the first of its kind, will enable the country to exploit opportunities available on India's shores. He said that the coastal belt will have a significant advantage in this regard.
"As such large opportunities are unfolding in the economy, we are also seeing increased interest from foreign investors," Khara said. Patient capital available in multiple centres around the world will find its way to India, he said.
"There is a huge demand for these services (ports and wind energy) in the economy. That demand will be something that will make it (the projects) commercially viable too," he said.
SBI is seeing decent traction, with over Rs 4.5 lakh crore worth of sanctions in the corporate lending book. Offshore wind energy is something the lender is keenly watching out for, he said.
As of March 31, SBI's overall corporate loan book stood at Rs 11.38 lakh crore. The infrastructure lending book stood at Rs 3.94 lakh crore, with power sector loans at over Rs 2 lakh crore, while roads and ports were at Rs 1.12 lakh crore. On June 11, NDTV Profit reported that SBI was looking to hire sectoral experts across 25 business segments in its project finance division.
Watch the full interview here:
