Frauds, disputes hit infra in India, says Deloitte

India is facing a grim investment sentiment in the infrastructure sector due to continued rise in frauds and disputes, accounting and consultancy firm Deloitte said in a report.

About 60 per cent of the respondents to a survey by the firm in August said the situation would drastically dampen the investment climate. The survey showed the bulk of the issues arise out of delayed environmental and land acquisition clearances.

The government is, therefore, working on changes in environment clearance guidelines and key legislative changes, including those related to land acquisition, prevention of corruption, whistle-blower protection and prevention of bribery of foreign public officials.          

“These legislations can provide a robust legal frame work that can foster an ethical environment for doing business,” Deloitte said in its report, Teething issues: Managing fraud and dispute challenges in the infrastructure sector.

The report is a compilation of 29 responses of C-level professionals, employed with various infrastructure companies in India. Around a half of the respondents said companies can feel compelled to resort to back channels, bribery and facilitation payments to avoid delays escalating project costs.

Further, 60 per cent of respondents indicated at least 15 per cent of their total investments in projects were delayed due to regulatory clearances, underlining the sentiment that business cannot go on without paying bribes and those who did not pay were denied clearances.