Industry minister Sikander Bakht will write to the Madhya Pradesh government to resolve the issue of extending cash flow guarantees to power projects in the state.
Nine power projects are held up because of the state government's decision to extend only limited guarantees through escrow accounts.
The projects have achieved financial closure and will have to rework power purchase agreements in order to qualify for the limited escrow cover.
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The industry ministry feels stipulating of such new conditions at this juncture will delay the projects further.
The decision to write to the state government was taken at Bakht's meeting with representatives from the cement and capital goods industry on Tuesday.
Bakht also agreed to write to other state governments for expediting infrastructure projects wherever they were facing procedural or implementation problems with the state governments.
Although the industry ministry has agreed to set up inter-ministerial panels to suggest measures to boost demand, the ministry feels the real remedy for beating the recession is to quickly implement pending infrastructure projects.
Once infrastructure projects get off the ground, it expects capital goods industries like cement and steel will see immediate rise in demand.
In fact, once the proposed power projects in Madhya Pradesh get going, the supply positions of BHEL, L&T, SAIL, Tisco and a string of other companies will climb significantly. These companies have equipment supply agreements with the power producers and have been waiting for commencement of the projects. The industry ministry is also collecting information on the status of infrastructure projects in other states before taking up their respective cases with the state governments. The ministry will invite secretaries of economic and infrastructure-related ministries for the next round of interface with industrialists so that decisions on specific issues can be taken on the spot.