Rs 11.4 trillion worth projects stalled till March: ICRA

Rating agency, ICRA has said that nearly Rs 11.4 trillion worth of infrastructure projects were stalled as of March 31, due to unfavourable market conditions, increased funding constraints and inadequate raw material linkages. Majority of the projects, which were stalled were from the private sector including from the sectors like steel, cement, aluminium, among others.

ICRA said that the growing number of stalled projects in the last two quarters, which are already high at 8 per cent of GDP is a matter of concern. While many projects were stuck for want of land or clearances, with the changing macro-economic scenario and weak commodity prices, viability and promoters' interest to continue with the projects, have also declined.

The agency stated that the Project Monitoring Group (PMG) of the government helped in resolving 353 projects worth Rs 11.7 trillion stalled over the last 3 years, which were particularly in power sector, but addition to projects accepted by PMG outpaced projects resolved. Another 390 projects with a cumulative investment of over Rs 19 trillion are still facing hurdles.

The Group, which was set up in January 2013 in the Cabinet Secretariat to revive projects both in the public and private sector, had accepted 743 projects with an estimated cumulative investment of Rs 31 trillion till February this year. It further said that structural constraints like uncertainty in land acquisition, delays in approvals and inadequacy of long-term funding avenues, if not tackled expeditiously, will slow down recovery in the infrastructure sector.