Assocham: Roll-out delays increase manufacturing projects cost by Rs 4.5 lakh crore
According to the findings of a study carried out by Assocham, crucial manufacturing projects have had to deal with cost overruns of Rs 4.5 lakh crore, as of FY 2013-14, because of delays in the roll out of the projects.
As per the study, the delays in the roll-out of manufacturing projects are generally caused due to fund constraints, delays in acquisition of land for the projects, and lack of timely clearances to these projects.
In some cases, the delays in project roll-out is also caused by the investors, owing to a number of reasons including improper planning, change of ownership, and lack of co-ordination with contractors and other stakeholders involved in the project.
The Assocham study has revealed that, during the financial year 2013-14, the manufacturing sector attracted total live investments worth more than Rs 30 lakh crore. Out of these live investments, nearly 44.5 percent investment projects have not been initiated thus far. The total worth of these non-starter projects is approximately Rs 13 lakh crore.
With regard to steps that need to be taken to prevent roll-out delays of manufacturing projects, Assocham Secretary General D S Rawat said: “The Government needs to ensure time-bound execution of projects and limit the time-frame for clearance by concerned authorities and penalise them if they are not able to meet deadlines.”
Source – The Economic Times
ASSOCHAM, delays in acquisition, FY 2013-14, Improper planning, manufacturing projects, roll-out of manufacturing projects
