With almost 300 mega projects worth about R15 lakh crore remaining stalled due to delay in clearances, PM Narendra Modi on Friday directed all ministries to monitor online the progress of infrastructure development, including foreign ventures of state-owned undertakings.
Since the government has approved 100% FDI in railways, Modi asked the ministry to come up with a “comprehensive plan” for facilitating FDI in the sector. He also emphasized the need to move forward with the linking of ports project “Sagarmala” as a key driver for his “Make in India” programme of making the country a global manufacturing hub.
The move comes after a review of progress of eight major infrastructure sectors ?civil aviation, ports and inland waterways, railways, roads, telecom, power, coal and renewable energy. The review coincides with release of IIP data that showed industrial growth crawling at 0.5% in July with the infrastructure sector, which contributes 38% to IIP, growing just 2.7%.
Delays in clearances for environment, mining and land acquisitions in the past three years have stalled 464 mega projects worth over R20 lakh crore which, according to Crisil, has increased the incremental capital output ratio (ICOR) to almost 8 by 2013-14 from 4.4 during the high growth period of 2003-04 to 2010-11. Higher ICOR means lower efficiency of investment, which is one of the main factors behind GDP growth slowing to 4.5% and 4.7% in the last two years.
Although the cabinet committee on investment along with the project monitoring group under the cabinet secretariat has cleared 150 odd projects so far, unlocking investment of R6 lakh crore, many high profile projects are still stuck.
After assuming office, Modi has started reviewing the progress in infrastructure every month. While highlighting that accelerated infrastructure development was his priority, Modi stressed on the need for creating world-class infrastructure in India.
Emphasizing the importance of monitoring the progress of infrastructure development through efficiency parameters which have been identified for each of the sectors, Modi said “ministries should monitor them on electronic reporting formats. Initiatives undertaken by state governments as well as PSUs with other countries, including SAARC countries, should also be taken into account while monitoring the progress of infrastructure sectors?.
Elaborating on each sector, Modi said the Sagarmala project should lead to port-led development and become a major link element for his “Make in India” vision, which envisaged a quantum jump in India’s global trade.
Emphasising on renewable energy including solar energy, the PM called for a solar-powered corridor along the India-Pakistan border in the desert regions of Rajasthan and Gujarat. “Two pilot projects of 5 MW each are being initiated in this regard,” he said.
Referring to his vision of solid waste management and waste water management in 500 towns through the PPP model, the PM said bio-energy would be a vital element of this vision. Modi also called for provision of world-class utility facilities along new road projects to bring about a paradigm shift in India?s global perception.
All the sectors broadly reported significant improvement in performance over the last four months, as compared to the previous year, a PMO release said.
