Tuesday, April 16, 2013

Rs 700,000 CRORE PROJECTS ARE STUCK..!!

In a recent meeting with the Finance Minister, P. Chidambaram, CMDs of all banks expressed concern over the fact that the infrastructure and industrial projects with total project cost of more than Rs 700,000 crores are either struck in between or awaiting implementation. These mainly include major highway projects, power projects and large industrial projects. The issues of coal linkages, determination of toll collection points, BOOT arrangement meeting regulatory hurdle and non-completion of financial closure are some of the main reasons.

Why the Government, industrial sector, financial sector and financial market are so helpless? Why the mood/ sentiments are so sluggish? The Public Sector Corporations have more than Rs 250,000 crores surplus cash and most of the large and mid-size industrial houses are also having piles of large cash resources (top 100 having more than Rs 150,000 crores). What is forcing them to stay back and
not to start investing in India? On the other hand Indian investment has increased many folds outside India meaning thereby business houses are feeling comfortable and profitable to invest outside India as compare to investing in their own country?
The reasons are uncertainty at the end of Government policy, Tax department aggression, lack of timely clearances by Government machinery and extraordinarily negative attitude of regulatory bodies. Bribery is another factor which cannot be ignored. The Government is busy in fighting corruption related litigation.

This state of affairs is leading the country to a disastrous situation resulting in unemployment, unrest and poverty. The growth of Indian business and inclusive growth of common man are all getting negatively impacted. We need to move and move fast, despite hurdles. Immediate steps have to be taken by the Government to ensure immediate movement in execution of stalled projects and to change the prevailing negativity and uncertainty in the minds of the investors. Proactive role of the Government machinery is the need of the hour.

Is Prime Minister and his cabinet team listening??

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