India Addresses Infrastructure Worries
Jun. 14 – Prime Minister Manmohan Singh directed the Cabinet Secretariat this month to create a Project Monitoring Group (PMG) to proactively assist private and public sector infrastructure investment projects receive prompt commission. The PMG will also be responsible for identifying stalled projects, which will be fast-tracked by the removal of implementation bottlenecks.
“We would like to remove these bottlenecks. We have set up the Cabinet Committee on Investment to look at precisely the bottlenecks which hamper the growth of [the] infrastructure sector,” said Prime Minister Singh.
The new initiative to facilitate quicker development of India’s infrastructure comes in the wake of an International Monetary Fund (IMF) report placing responsibility for the country’s economic slowdown on underdeveloped infrastructure and power supply problems. Implementation of infrastructure projects has been slow due to burdensome regulations leading to implementation bottlenecks.
“The main reasons for slowing growth are structural in nature more than lack of financing. Things like getting projects approved and cleared and implemented seem to have slowed down,” said Thomas Richardson, Senior Resident Representative of the IMF in India.
India has seen its GDP growth fall over the past two years from a high of 10 percent in 2010 to 6 percent in 2012. The Economic Advisory Council projects that growth in the 2013-14 fiscal year will be around 6.4 percent.
Prime Minister Singh initiated the PMG project as a way to facilitate quicker economic growth in India through relieving the strain caused by these regulatory bottlenecks.
“Our principal concern is to strengthen the impulses to accelerate the process of investment, particularly the investment in infrastructure which has been a big bottleneck [holding] up our growth process,” remarked Prime Minister Singh.
The proposal to assist the quick implementation of investment projects has been received favorably by all relevant ministries and has already seen actions taken to facilitate its implementation.
Responding to Prime Minister Singh’s call for quicker implementation of investment and infrastructure projects, the Ministry of Finance has identified 215 companies currently stuck in the implementation bottleneck. The Ministry of Finance will work with the relevant regulatory authorities to remove the bottlenecks and assist these companies in moving forward with their projects.
The Ministries of Commerce, Coal, and Power are also working to identify projects that have been hampered by these implementation bottlenecks.
The Cabinet Secretary has created an “Online CCI Project Tracking System” that will monitor projects through an online portal available on the Cabinet Secretariat’s website. This will allow officials to monitor the progress of important projects and more actively expedite the necessary procedures.
According to a Ministry of Finance press release, these changes are “expected to expedite the approval process without compromising on due diligence and physical prudence.”
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