Projects worth Rs 26.5 lakh cr stuck on regulatory issues: Assocham

Around 1,550 projects with investments worth about Rs 26.5 lakh crore remained stuck at different stages as of end-December across 21 states on issues such as land acquisition and lack of funds, an industry body said in a study.

The other reasons include lack of clearances, unfavourable market conditions, lack of promoter interest and poor supply of raw material, Assocham said in a study.

There were a total of 16,966 projects with investments worth over Rs 154 lakh crore from various sectors, both public and private sources, as on December 2014, it said.

"Over 1,550 projects with investments worth about Rs 26.5 lakh crore remained stuck in different stages as on December 2014 across major 21 states in India," it said.

Infrastructure sector accounted for lion's share of about 45 per cent of stuck projects followed by manufacturing, housing construction, electricity generation and irrigation.

Stuck projects have been a major concern for policymakers as not only their cost is very high to the economy but also because it significantly impacts investor sentiments, it said.

"Stuck investments have an evident effect of lowering the growth rate, besides stuck projects will have implication on cost of investments in real term and that will raise the capital-output ratio, an effect which can spread to other sectors as well," it added.