Amid increasing fiscal deficits and tumbling investments, the Finance Minister P Chidambaram has urged his cabinet colleagues to work united with the goal to overcome the policy paralysis, by noting that about 700 projects of investments totaling to Rs 7,500 crore are paused due to delays caused by the absence of regulatory approvals.
He noted that the lack of pace is due to the lack of environmental and other regulatory approvals as well as problems arising from land acquisition, difficulty in arranging financing and due to stringent fuel supply. He also stressed on garnering more investments into the nation, while noting that domestic and foreign cash inflows are drying up. The centre had introduced many reform measures including policies with procedural in nature, by aiming to break logjam and taking off the hurdles in investment flows.
About 300 projects came to a halt with approvals held up at various government departments in line with the peaked policy paralysis and bureaucratic delays, during September 2011 and June 2012, when finance ministry was headed by Pranab Mukherjee, now the President of India. He also pointed out that the fresh investment proposals has pummeled in the third quarter of 2012 , which notched near Rs 2,000 billion, while government investments has also trimmed to Rs 500 billion.
The finance ministry had revised the targeted fiscal deficit numbers to 5.3% from the envisaged figure of 5.1% in the 2012 budget. While the fiscal consolidation roadmap was put forth by the FM on October 29 calls for trimming the fiscal deficit to 4.8% for the fiscal ending March 31, 2014 and to 3% by 2016-17. And the trade deficit was forecasted to be a negative $180.3 billion, the current account deficit is expected to touch a negative $70.3 billion by the end of this financial year.
Amid this tough situation, the Prime Minister Manmohan Singh has also urged the ministers to increase the pace of approvals and to ensure to make the stranded projects back on track within the next five months of the current financial year, for reviving the growth of the nation.
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