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Finance Ministry reviews 85 large projects valuing Rs 3.51 lakh crore

In a bid to revive investment and build confidence among banks to lend, the finance ministry on Tuesday reviewed 85 large projects valuing Rs 3.51 lakh crore in steel, ports, shipyard and road sector. Hasmukh Adhia, secretary, department of financial services, conveyed a meeting – to discuss pain points that is hurting the economic growth – with senior officials from the Reserve Bank of India, CEOs of 13 banks such as State Bank of India, IDBI Bank and Indian Bank and bureaucrats from different Ministries.

“The main purpose of today’s meeting was to understand the various reasons for stress in some of the infrastructure projects, what are the factors affecting the health of infrastructure projects and also to put in place a coordinated mechanism for dealing with the stressed projects,” said Adhia. He indicated that about 4% of the projects discussed in the meeting has turned into non-performing assets.

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Rising number stalled projects has not only hurt the earnings capacity of banks but also prevented corporates from making fresh investments affecting the economic growth. Close to 1400 projects are stalled due to issues related to clearances from different ministries on land acquisition, environmental matters and fuel linkages. RN Chaubey, secretary power ministry said, “I can safely say that within the next couple of months the issue of coal supply not being there would have been substantially taken care of.

Adhia pointed out that the meeting did not focus only on stalled projects but also steps that can be taken to ensure that the healthy projects don’t face similar problems. “It is not that we are discussing only the NPA projects because all the problems are common to many of them. And we want to address the common problems in which by intervention of some policy measure by ministry or by collective measure from we can save those projects. It’s a preventive exercise,” he said.

Commenting on the meeting, SBI chairman, Arundhati Bhattacharya said, “This is a good forum for banking sector to get to know what processes that are being followed. What are the pain points and that being looked at and what is getting resolved. This gives you a heads up as to what could be resolved in the future and therefore new projects coming up what we could expect.”

Chaubey indicated that power projects with 65,000 mega-watt capacity has won coal blocks auctions. As far as gas is concerned there is 24,000 mw of capacity which is either fully or partly stranded. Ministry of power has decided to import gas or LNG through GAIL. He further said that about 18000 to 19,000 mw of coal based project still need coal for which ministry of coal will continue to hold auctions. It is expected that those projects which have been left out and could not win a coal block will get a chance to again participate in coal block auctions.

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