NEW DELHI: A day after official data showed the slowest GDP growth in nine years and amid rising concerns over the persistent slump in investment demand, Prime Minister Manmohan Singh on Friday set up an investment tracking system to ensure speedy implementation of projects with outlays of R1,000 crore and above.
These major projects will be specially tracked “to take them forward on a fast track in order to provide a fresh impetus to the economy”, according to a statement issued by the Prime Minister’s Office (PMO).
India’s economic growth rate during 2011-12 slipped to a nine-year low of 6.5% mainly because of a slowdown in manufacturing, sluggish investment scenario and inadequate growth in consumption demand. As per the Central Statistics Office data released on Thursday, both private consumption demand and fixed investment grew at a dismal rate of 5.5% in 2011-12, against 8.1% and 7.5%, respectively, in the previous year.
Given that the export demand is likely to remain subdued in the current fiscal due to the difficult global situation, fast-tracking domestic projects is essential to pep up aggregate demand.
Singh’s initiative is in the context of delays faced by projects on multiple fronts – security scrutiny, environmental and other clearances, problems associated with land acquisition, etc. “While existing rules and laws have to be followed, it was widely felt that a lot of the delay is avoidable if only there is a will to resolve matters,” the PMO said.
While implementation of public sector projects of over Rs 1,000 crore will be tracked by the National Manufacturing Competitiveness Council, those in the private sector would be monitored by the department of financial services in the ministry of finance. Both agencies will come out with quarterly statements of all projects monitored by them and of any issues identified that needed resolution, either systemically or individually.
Several mega projects, including South Korean steel major Posco’s proposed $12-billion steel plant in Orissa, have been hanging fire because of regulatory clearances and land acquisition issues.
Issues concerning delay project implementation was raised by India Inc at the last meeting of the Prime Minister’s Council on Trade and Industry in December.