Policy

Chidambaram promises to get stalled projects moving

Our Bureau Mumbai | Updated on March 12, 2018

Finance Minister P. Chidambaram and Maharashtra Chief Minister Prithviraj Chavan coming out after a meeting with corporate honchos and bankers in Mumbai on Monday. — Paul Noronha   -  Business Line

A file photo of Finance Minister P Chidambaram

Meeting with bankers, industry heads identifies reasons for project delays

Finance Minister P. Chidambaram will “get in touch” with various Ministries to remove the hurdles that are holding up some 300 projects.

After meeting industry leaders and top bankers here on Monday, Chidambaram said: “The agenda (of today’s meeting) was to identify the projects that have been stalled. We have identified 215 projects that have been stalled for one reason or other. We have identified another 126 new projects to which banks have sanctioned loans but which have not taken off.”

Finance Ministry estimates that of the 215 stalled infrastructure projects, 106 are in the power sector, 79 in road, 20 in iron and steel, and 5 each in cement and port sectors.

Bank funds locked up

All these projects, which collectively involve an outlay of over Rs 7 lakh crore, have been funded by public sector banks (PSBs). As of December-end 2012, public sector banks had disbursed Rs 54,000 crore to the projects.

The meeting comes on the back of a government estimate that economic growth will fall to a decade low of 5 per cent in FY13. Many analysts are blaming stalled projects and declining investments as among the major factors hurting growth

The Minister said that “most of the reasons for project delays are related to land acquisition, gas or coal linkages, environmental or forest clearances and in some cases the inability or the unwillingness of the bank to restructure loans.”

State Bank of India Chairman Pratip Chaudhuri hoped the Finance Minister will resolve some of the issues faced by the industry. He said there could be more such meetings.

At today’s meeting, there was discussion over why things are not moving forward in the infrastructure space.

Bankers also conveyed to the Minister that due to current dispensation on non-performoing loans (bad debts), there are difficulties in providing more finances.

Kumar Mangalam Birla, Chairman, Aditya Birla Group, said: “The Finance Minister went into a lot of nitty-gritty. He was very concerned and felt that these projects need to be completed.”

Minister takes Notes

Birla also said that Chidambaram took notes about of the grievances of the industry and assured them of action soon.

Indiscriminate mining by some large corporations in complete violation of norms led the Supreme Court and the Environment Ministry to put curbs on mining. In the last couple of years, environment clearances have been hard to come by.

As for land acquisition, it is hoped the new Land Acquisition, Rehabilitation and Resettlement Bill will solve issues of inadequate compensation that have led to inordinate delays in getting land for key infrastructure projects.

>satyanarayan.iyer@thehindu.co.in

> beena.parmar@thehindu.co.in

Published on April 08, 2013

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