STALLED PROJECTS - PM INTERVENTION AND MORE....

By Ruma Dubey

It was a very reassuring to read that once a month the Prime Minister himself gets involved personally to oversee how stalled projects across India re progressing. He had promised that he will cut the red tape and this is a good step in that direction. But India is a huge and complex country, not a small state and the bureaucracy has been dysfunctional for as long as one can remember.  Thus it is probably this centralized form of governance only which can help move ahead.

So do you know how this once-a-month meeting works? This initiative was started since March and the meeting is usually scheduled  for the fourth Wednesday of every month. Central and state bureaucrats from various ministries– usually from law, land, environment, energy, transport and finance are linked via video with Modi. Land, environment, finance, power are usually the reasons why most projects are stalled. Thus Modi prefers to have the very reasons why projects are stalled to be there.

One week ago, the agenda is set and not all the thousands of projects but around 12 projects are put up for consideration.  So as each project comes up for review and the reason why it is stalled is known, Modi turns to the ministry concerned and asks the reason for the delay. It is as direct as that.

The good news here is that his intervention helps. Take the case of Akhilesh Yadav, CM of UP. He had written to the PM sometime in early Sept about the stalled $1 billion metro rail project. This was immediately included in the September agenda and the project managed to get the clearances required. One does not yet know what clearances were given but trial of metro train is scheduled to be started in August 2016 and final operation will be started in December 2016. That seems a little too ambitious but at least there is a date now…not a dark tunnel.

This intervention is good but the sad news is that it is not enough. The red tape is deeply embedded in the system that even Modi’s direct intervention alone will not help. As per data put out by CMIE, till end of September 2015, the stock of stalled projects for Q2FY16 was at 9.9 trillion v/s 8.8 trillion (QoQ).  And what emerges from this is also that clearances are happening but land acquisition remains the single biggest hurdle. Lack of promoter interest, feul/feed stock/raw material supply problem and unfavouable market conditions are persistent reasons and this is something which cannot be resolved over a video link. But there is no denying that the monthly intervention has brought down number of projects stalled on account of environmental clearances, other clearances and paucity of funds.

Maybe what can be done is put the entire data of the stalled projects on the website, so that one can assess what is stuck where and maybe, it could attract attention from some company or fund, which has help tide over the issues. What also needs to be done urgently is get the Land Bill off – that one Bill alone can help resolve so many economic woes.

This is a good move by the PM. It is too centralized given the size of our country but that is the need of the hour. This is years of malaise which has set into the system and it will take years to get all the scum out, oil the system and get it working again.