IN ORDER to lift confidence among global investors in India’s business environment, the Prime Minister’s Office (PMO) plans to weed out yet-to-take-off ventures from among stalled projects in the country.
The recommendation: Label proposals languishing on the drawing board as ‘shelved’ or ‘dropped’ or ‘abandoned’ if the promoters have no further intention to start implementation. Such a move is expected to bring down the number and investment value of stalled projects.
As of last month, there were 925 projects with an anticipated investment of Rs 13.25 lakh crore that had been marked as ‘implementation stalled’ on Private Economic Databases (PEDs). Of these, the top 100 projects, in terms of monetary value, constituted more than 75 per cent of the total promised investments.
“Wherever the project proponents have decided not to pursue the projects, the same should be explicitly stated on the (e-suvidha) portal to help Private Economic Databases (PEDs) to appropriately reclassify the project,” the PMO’s Project Monitoring Group (PMG) said in a communique to several ministries last month.
“Continued classification of mere project ideas as ‘implementation stalled’ projects in public domain has been reflecting the investment scenario in poor light even though the promoters themselves have not taken any concrete/firm step towards the project implementation for a variety of reasons,” the note said.
The PMG believes that these projects in reports released by PEDs have been “negatively impacting the sentiments about the ongoing investments in the economy and portraying an unduly gloomy scenario of increase in ‘implementation stalled’ projects”.
The PMG, set up to facilitate clearances for projects with investments of over Rs 1,000 crore, has directed ministries related to the economy to ascertain if a project was “really stalled”, considering the government had initiated a slew of reforms and policy measures for supporting fresh investment.
“Line ministries should collect updated project information and take steps in consultation with the project proponents to ensure that such information is appropriately reclassified,” the note suggested. The ministries were given until February 15 to update the project’s profile.
Among the top 100 ‘implementation stalled’ projects, 48 with proposed investment of Rs 4.58 lakh crore are in the power sector, while 22 of Rs 2.77 lakh crore are in the steel sector. Most of the projects in power and nearly all projects in steel are private sector initiatives.
Last February, the then Commerce and Industry Minister Nirmala Sitharaman told the Rajya Sabha that there was “no prescribed criterion for classifying a project as a stalled project”; the PMG did not distinguish between a ‘stalled’ or an ‘under implementation’ status in accepting a project for resolution.