Infrastructure ministries are likely to inform Prime Minister Narendra Modi at a meeting on September 10 that credit squeeze, rising non-performing assets, delays in clearances and troubled land acquisitions are some of the factors impeding growth of the sectors they oversee. The meeting is to be held on the day when Modi completes 100 days in office.
“The PMO has informed us that Modi will chair a meeting to review the progress in roads, ports, aviation, airports, coal, power and shipping sectors at his residence. There would be a comprehensive review of the progress achieved in these sectors and also the constraints hampering their growth,” a top government official told this newspaper.
It is learnt that Planning Commission secretary Sindhushree Khullar has vetted a presentation for the Prime Minister’s Office, which will form the basis for the review.
Secretaries of concerned ministries are working overtime to ensure foolproof replies for possible slippages in their respective sectors with cogent reasons.
Modi had in a meeting with secretaries in June, goaded them to be forthright in their approach and convert ideas into actions. Modi would review further progress on January 15, 2015 and also two months later.
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The finance ministry representatives are expected to point out that rising number of non-performing assets (NPAs) is severely impacting the lending ability of the state-run banks. Gross NPAs of public sector banks increased from Rs 1,64,462 crore to
Rs 2,27,264 crore at the end of March 2014. The Financial Stability Report released by the Reserve Bank of India suggests that infrastructure, iron and steel, textiles, mining and aviation services added to the level of stressed advances.
Despite the RBI allowing the banks last month to lend to very long-term projects, with an option to refinance it periodically “there is no visible improvement in their risk appetite. This, despite the leeway provided to them for getting higher returns on their bonds”, the report said.
Although the infrastructure sector grew by 7.3 per cent in June, concerns continue on stymied growth in areas like natural gas and fertilisers, with a negative growth of 1.7 per cent and 1 per cent respectively while steel output slid by 4.2 per cent in June from 7.6 per cent the same month last year.
The 11th Five Year Plan had projected investment for infrastructure of about Rs 20.5 lakh crore and Rs 41 lakh crore has been estimated in the 12th Plan, according to the Planning Commission Secretaries of power, steel, mines, roads and aviation ministries are likely to convey that greenfield ventures deserve more attention as difficult land acquisition, relief and rehabilitation and stringent green norms are emerging as challenges to successful execution.
Tardy green clearances for around 110 projects with a minimum investment of Rs 5,000 crore are also slated to come up at the meeting.
What makes the upcoming review meeting different is that while monitoring targets for projects is intense, slippages will be conveyed to the PMO within a reasonable time with explanation for delays.