CCI impact partial on stuck projects
After one year of its formation, the Cabinet Committee on Investment (CCI) is said to have unlocked 144 stalled infrastructure projects worth Rs 5.27 lakh crore. 253 more projects, however, with an investment of Rs 12.82 lakh crore, are still stuck for various clearances.
Power, coal, steel, petroleum & natural gas, and road transport & highways sectors form most of the pending projects with the Cabinet secretariat’s Project Monitoring Group (PMG). PMG looks at only projects worth more than Rs 1,000 crore.
Jindal Synfuels’ coal to liquid (CTL) project worth Rs 77,450 crore and the Tata Sasol CTL project worth Rs 60,000 crore, both in Odisha, are the two biggest projects to be unshackled by CCI. Followed by the Raigarh Expansion Project (Rs 42,345 crore) in Chhattisgarh, the Tilaiya Ultra Mega Power Project (Rs 40,000 crore) and JSPL Pataru Steel Project (Rs 37,367), both in Jharkhand.
The Posco steel plant in Odisha, which had an investment interest of Rs 52,813 crore, is considered another CCI achievement. Other projects cleared are mainly from the coal and power sectors.
Industry has often been voicing its concerns on the hurdles in clearances for infrastructure projects, which has lead to a slowdown in manufacturing and industrial activity. Industrial output plummeted for a third month in a row in the previous quarter, by 0.6 per cent, while the manufacturing sector contracting 1.6 per cent. Manufacturing fell 1.9 per cent in the gross domestic product data for the third quarter against a one per cent growth in the second one.
However, a silver lining is the data with public sector banks (PSBs) on new investment proposals during October-December 2013. PSBs received 103 proposals for new projects with an investment of Rs 4.59 lakh crore in the quarter, against 173 projects worth Rs 3.24 crore in the July-September quarter. Each of these projects involves an investment of Rs 250 crore and above.
Commercial real estate forms the major chunk for most of the new projects (34), involving a total outlay of Rs 30,838 crore. Followed by, 19 power projects worth Rs 266,477 crore, 15 road projects worth Rs 13,471 crore, and seven iron & steel projects with an investment of Rs 37,854 crore. The amount sanctioned by banks for these 103 new projects is Rs 24,627 crore. However, the real impact will be felt after a gap as most of the infrastructure projects have long gestation period.
The Confederation of Indian Industry said in a recent survey that though there is some growth in the infra projects, industry is looking forward to strong action on all these aspects to provide an impetus to growth. For April-December 2013, fixed investments fell by one per cent, on a weak base of contraction by 0.1 per cent in the same period a year before, said CRISIL.
Thomas Richardson, senior resident representative of the International Monetary Fund (IMF), recently said while talking on the key concern is a lack of infra projects in the pipeline. “Even if the CCI is hugely successful in getting stalled projects up and running again, the pipeline of new investment after the stalled projects is really thin. That is the worst effect of the slowdown,” he said.
Source: The Business Standard
cabinet committee on investment, CCI, Chhattisgarh, coal, Commercial real estate, Confederation of Indian Industry, CRISIL, CTL, Highways, IMF, International Monetary Fund, Jharkhand, Jindal Synfuels, JSPL Pataru Steel Project, Odisha, petroleum & natural gas, PMG, Posco, Power, Project Monitoring Group, PSB, Public sector banks, Raigarh Expansion Project, Road transport, steel, Tata Sasol, Tilaiya
