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With a little more than Rs 7 lakh crore of projects reportedly stalled at various stages of implementation, leaders of corporate India on Monday complained to the finance minister of the problems they faced on the reasons why. Environmental clearances were one major grouse.
Finance Minister P Chidambaram on Monday met the bankers and leaders of India Inc to discuss issues regarding the stalled projects, with the aim of resolving these issues and refuelling the investment cycle. The finance ministry had identified 215 projects stalled projects, each of Rs 250 crore and above. These are mostly financed by public sector banks. Apart from environmental clearances, the projects are also stalled due to fuel linkages and land acquisition hurdles, said bankers.
One of the chief executives (CEOs) who attended on Monday’s meeting said the minister assured them he would take up the matter with his counterpart in the environment ministry. Some of the biggest road and power projects are awaiting clearances from the latter ministry.
The FM was also apprised about delays in land acquisition delaying many infrastructural projects, such as the Navi Mumbai airport. After on Monday's meeting, CEOs say they now expect the government to take “big bang” steps in re-starting stalled projects. A CEO of an infrastructure company said the National Highways Authority of India would soon float tenders for road projects worth Rs 30,000 crore for construction of 3,000 km of highways, a big confidence booster.
“We are sitting with bankers and the industry to find why a particular project has been stalled and I am noting that down, to go back and try to remove that block,” Chidambaram told reporters, after attending the closed-door meeting at the Taj Mahal Hotel in Colaba.
‘Into the nitty-gritty’
Industry captains seemed satisfied with the minister’s effort to address the issues. “He went into a lot of nitty-gritty (over stalled projects). He was very concerned and, overall, a very clear mandate was that these projects need to be completed,” Aditya Birla Group chairman Kumar Mangalam Birla told reporters.
Chidambaram went into details on each of those projects, not just at a general level, Birla said. “He asked each of us to talk about the projects and apprise him about the issues. He personally took notes and I am sure he will take actions on whatever is required.”
Chiefs of Mumbai-based public sector banks – State Bank of India, Bank of Baroda, Union Bank of India, Central Bank of India — attended. Industry was represented by Anil Ambani, chairman, Reliance ADAG group; Prashant Ruia of Esaar; Ajit Gulabchand, chairman of Hindustan Construction and Madhu Kannan of Tata Sons, apart from K M Birla.
Chidambaram further said, “We’ve identified 215 projects which for one reason or another are stalled. We’ve identified another 126 which are new projects, to which banks have sanctioned loans but which have not taken off.”
There are four or five reasons for which projects have been stalled, Chidambaram said. “The projects are held up due to issues like land acquisition, gas or coal linkages, environmental clearances, forest clearances and, in some cases, the inability or unwillingness of the bank to restructure the loans.”
Chidambaram said the next meeting of the Cabinet Committee on Investment would take up 31 oil and gas projects for clearance, as the ministry of defence, the Defence Research and Development Organisation and the ministry of oil and natural gas had sorted all the contentious issues.
