Arbitration law would unlock the capital flow in construction sector: Assocham

Almost Rs 5 lakh crore has been stuck in arbitration involving the EPC projects mostly awarded by the Centre and the state govts

Industry body ASSOCHAM on Monday said it was hopeful that the newly enacted Arbitration Act was going to unlock the flow of capital into the construction industry by enabling a speedy resolution of disputes.

"Almost Rs 5 lakh crore has been stuck in arbitration involving the EPC projects mostly awarded by the Centre and the state governments. Even if 30-40 per cent of this money gets released through a faster resolution process the flow of capital into the system would be sufficient to revive the sector," Sunil Kanoria, president of Assocham said.

Addressing a press conference on the broader steps needed for the growth of the economy, Konaria said a positive environment was building in the infrastructure sector due to various steps, including the award of new road projects, enactment of new arbitration law, being initiated by Government of India.

Expressing his disappointment on lack of political consensus over the introduction of the Goods and Services Tax (GST), Kanoria said their association would strive to build pressure on the policy makers about the urgent need for the introduction of GST.

"A disturbing message is going to the investors community about lack of political consensus on economic reforms in India which, otherwise, has a lifetime chance to led global economic growth, an opportunity the country cannot afford to miss,"Assocham said in a statement.