Stalled projects see a sharp decline.

Finally, there’s some good news for India Inc and the National Democratic Alliance (NDA) government. Stalled projects, a major concern on the economic front, are coming back on track, with the value of such projects declining by more than half in the past year. According to data provided by the Centre for Monitoring Indian Economy (CMIE), the value of stalled projects dipped 60.35 per cent to Rs 79,300 crore in the quarter ended June this year from Rs 2,00,000 crore in the year-ago period.

“During the past year, expectations of resolution to problems afflicting projects have increased. This has played a very important role in reducing the incidence of projects being stalled. Besides, for a long time now, new investment projects have been falling. Therefore, the stock of projects that could be stalled is growing at a lower pace than earlier,” said Mahesh Vyas, managing director and chief executive of CMIE.

Of the 758 stalled projects, most were showing signs of traction because of a change in government, a stable leadership and faster project clearances, experts said. During the last three years of the United Progressive Alliance government, a large number of infrastructure projects were either stalled or abandoned, primarily due to lack of environment clearances, land acquisition delays and high cost of funds.

An HSBC report said the April-to-June “unstalling activity” was largely focused on manufacturing and transport services (primarily roads and rail), which together accounted for half the stock of stalled projects; not as much in mining, electricity and construction, which account for the other half.

The positive trend has also been captured by Deutsche Bank, which, in a report dated June 22, said the last quarter of FY15 saw a pick-up in project approvals. “The last quarter of FY15 indeed marks the highest number of clearances received since the fourth quarter of 2013. Coal was among the key sectors to see a spurt in clearances, receiving 14 clearances, one of the highest since FY13. The metals sector also saw a rebound in clearances,” it said.

BS