The Cabinet Committee on Investments, Prime Minister Manmohan Singh’s initiative to revive investor sentiment, seems to be making some headway in getting stalled projects worth lakhs of crores moving again. As of last week, the panel set up in January had resolved bureaucratic hurdles that had held up 92 major investment projects worth around Rs.3.5 lakh crore, which is about 4% of India’s gross domestic product.
Public as well as private sector promoters have sought a rescue act from the CCI for around 330 stalled investments with a capital expenditure of over Rs.15.5 lakh crore. The projects that have got a green signal for execution constitute nearly a third of that workload in numbers and about a fifth in terms of investment value.
"Over 125 different clearances and approvals were pending for these 92 projects, all of which have been resolved," said a senior government official aware of the development. With the lifting of official impediments, the government has now tasked the Department of Financial Services in the finance ministry to monitor the actual flow of these investments on the ground and report back to the cabinet. Banks have substantial exposures to the stalled projects.
The primary mandate of the cabinet’s investment panel is to identify projects that entail an investment of Rs. 1,000 crore or more in sectors such as infrastructure and manufacturing, and resolve systemic obstacles, including the lack of official clearances.
Most of the projects that have got relief thanks to the CCI’s intervention are power plants that needed coal supplies to kick off electricity generation. Power sector investments worth Rs.3.09 lakh crore are expected to get off the ground soon, accounting for 90% of the projects resolved by the CCI in terms of investment value. While 70-odd power sector investments can now be commissioned — some of them in this quarter itself, pending issues have been untangled for just two to three projects each in sectors such as roads, steel, railways, oil and gas.
"Fuel supply pacts have already been signed by Coal India and its subsidiaries for power projects with a capacity of around 70,000 MW, following the CCI’s diktat in March to allocate fuel for 78,000 MW of proposed generation capacity," said the official.