Scores of projects stuck over environmental, land clearances; to tell PMO that investment boost requires fast-track approvals.
Coal India Ltd (CIL) plans to use Prime Minister Manmohan Singh’s latest drive at boosting economic growth by hastening the commissioning of major infrastructure projects as a useful lever. It is going to demand quick clearances of the PM’s Office as a condition for advancing investments.
As part of a plan to boost flagging infrastructure growth, the PMO had recently asked all cash-rich public sector undertakings (PSUs) in key sectors such as power, coal and fertiliser to advance their investments planned for 2012-13. It had asked for a report within three weeks.
Government-owned CIL accounts for 82 per cent of domestic coal production and is sitting on cash reserves of Rs 43,000 crore. It was among the PSUs identified by the PMO where a cash surplus could be utilised to improve spending for spurring growth.
| CONDITIONAL PLAN * PM rolls out growth strategy by utilising cash reserves of PSUs * The plan is a part of the strategy to narrow fiscal deficit * Coal India’s Rs 43,000-crore cash reserve, that generates interest income of Rs 4,000 crore annually, to be part of this plan * Coal India warns delayed clearances could play spoilsport * It will give revised investment plan to PMO in two weeks, but with riders |
“The feasibility of the proposal of advancing investments depends on how quickly project clearances come. We will also say in the report that for the proposal to fructify, speedier clearances are required. If clearances do not come on time, we will have problems,” a senior executive from Coal India told Business Standard.
It has told its seven subsidiaries to file reoriented investment plans, after which a final report would go to the PMO within two weeks.
The government wishes to keep infrastructure spending during the current plan period (which ends this March) to nine per cent of gross domestic product (GDP) as against five per cent of GDP spent during the previous Plan. While this required spending Rs 20,56,150 crore by 2011-12, the government could manage to spend only around half of this during the three years ending March 2010. The coal sector could spend a mere 39.2 per cent (Rs 14,700 crore) during the period as against the Plan outlay of Rs 37,100 crore.
Last year (2010-11), Coal India had planned to spend Rs 10,000 crore.
However, Rs 6,000 crore of this, meant for acquisition abroad, could not be spent. This year’s target was kept at Rs 10,200 crore. With no success registered on acquiring assets this year, too, the company is hopeful of spending at least the remaining Rs 4,200 crore by March, chairman N C Jha told Business Standard.
There are 177 proposals of CIL for mining in forest areas that await environmental clearance. Many other projects await land clearance, with the difficulty in acquiring land for projects at an all-time high.
The PMO has also advised the company to actively consider investment in allied sectors such as roads, railways, waterways and power, which would help the coal sector through improved evacuation and utilisation of coal.
CIL’s share price at the Bombay Stock Exchange on Monday closed at Rs 340.5, down 0.9 per cent as compared to the previous close.
