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With more than Rs 7 lakh crore worth projects stalled at various stages of implementation, leaders of Corporate India today complained to the finance minister hassles faced by them due to environment clearances for their projects.
Finance Minister today met the bankers and leaders of India Inc to discuss issues regarding stalled projects with the aim to resolve the issues and kick start the investment cycle. The finance ministry has identified 215 projects of Rs 250 crore and above which are stalled.
These projects mostly are financed by public sector banks. Apart from environmental clearances, projects are also stalled due to fuel linkages, land acquisition hurdles, among others, bankers said.
One of the CEOs, who attended the meeting in Mumbai, said the finance minister assured the gathering that he will take up the matter with his counterpart in environment ministry—Jairam Ramesh. Some of the biggest infrastructure road and power projects in India are awaiting clearances from the green ministry.
The FM was also apprised about the delay in land acquisition which has delayed many infrastructure projects like Navi Mumbai airport. After today's meeting, CEOs say they are now expecting the government to take "big bang" steps in re-starting stalled projects.
A CEO of a infrastructure company said the National Highway Authority of India will soon start float tenders for road projects worth $6 billion for construction of 3,000 kms of highways—which will be a big confidence booster.
"We are sitting with the bankers and the industry to find out why a particular project has been stalled and I am noting that down to go back and try to remove that block," Chidambaram told reporters after attending the closed door meeting today at the Taj Mahal Hotel in Colaba.
Industry captains also seemed to be satisfied with the finance minister’s effort to address the stalled projects issue.
“He (Chidambaram) went into a lot of nitty-gritty (over stalled projects). He was very concerned and overall a very clear mandate was that these projects need to be completed," Aditya Birla Group Chairman Kumarmangalam Birla told reporters.
Chidambaram went into details on each of those projects, not just at general level, Birla said, adding "he asked each one of us to talk about the projects and apprise him about the issues".
Birla also said that Chidambaram was keen that these projects took off. "He personally took notes and I am sure he will take actions on whatever is required."
Chiefs of Mumbai based public sector banks – State Bank of India, Bank of Baroda, Union Bank of India, Central Bank of India attended the meeting. Industry was represented by Anil Ambani, chairman, Reliance ADAG group, Prashant Ruia of Esaar, Ajit Gulabchand, chairman HCC and Madhu Kannan of Tata Sons apart from Kumarmangalam Birla.
Chidambaram further said that, “We've identified 215 projects which for one reason or another are stalled.” “We've identified another 126 projects which are new projects, to which banks have sanctioned loans but which have not taken off,” he added.
There are four -five different reasons for which project have been stalled Chidambaram said.
“The projects are held up due to issues like land acquisition, gas or coal linkages, environmental clearances, forest clearances and in some cases the inability or the unwillingness of the bank to restructure the loans.”
Chidambaram said that next meeting of Cabinet Committee on Investments (CCI) will take up 31 oil and gas projects for clearance as ministry of defense, Defense Research and Development Organisation (DRDO), ministry of oil and natural gas have sorted the issues.
