Chidambaram meets bankers, corporate honchos
Many analysts are blaming stalled projects and declining investments as among the major factors hurting growth.
Mumbai: Amidst the ongoing gloom on the economic front, Finance Minister P Chidambaram on Monday allayed fears of the industry over stalled projects and assured all steps to remove the bottlenecks. "The agenda was to identify the projects that have been stalled. We've identified 215 projects which for one reason or another are stalled. We've identified another 126 projects which are new projects, to which banks have sanctioned loans but which have not taken off," Chidambaram told reporters after the meeting.
Those in attendance included industrialist Anil Ambani, Prashant Ruia of Essar, Ajit Gulabchand of HCC and Madhu Kannan from Tata Sons.
Chidambaram was accompanied by Banking and Financial Services Secretary Rajiv Takru. Bankers present included SBI Chairman Pratip Chaudhuri and heads of Bank of India, Central Bank of India and Union Bank of India. "We are sitting with the bankers and the industry to find out why a particular project has been stalled and I am noting that down to go back and try to remove that block," Chidambaram added.
The meeting comes on the back of a government estimate that economic growth will fall to a decade low of 5 per cent in FY13.
Many analysts are blaming stalled projects and declining investments as among the major factors hurting growth. "He (Chidambaram) went into a lot of nitty-gritty (over stalled projects). He was very concerned and overall a very clear mandate was that these projects need to be completed," Aditya Birla Group Chairman Kumarmangalam Birla told reporters.
The Finance Minister went into details on each of those projects, not just at general level, Birla said, adding "he asked each one of us to talk about the projects and apprise him about the issues".
Birla also said that Chidambaram was keen that these projects took off. "He personally took notes and I am sure he will take actions on whatever is required."
Assocham President Rajkumar Dhoot said the Finance Minister assured he would do his best to resolve the issues. "This is a first and a very good step taken by the Finance Minister of talking individually to everybody. He noted down all the things and he heard us very patiently. He said he will try his level best," Dhoot said.
Stating that issues such as land acquisition and environmental clearances were hampering completion of a number of projects by his firm, Gammon Infrastructure Projects Managing Director K K Mohanty said he expects things to move.
"I told him that we were allotted six projects last year, which should have started in six months. But despite all financial closure and bank sanction, these projects are yet to take off even after 18 months of being awarded," Mohanty said.
"These projects have not yet started because of the issues like land acquisition and environmental clearance, among others," he added.
Mohanty said even those projects which are off the ground are nowhere near completion due to stumbling blocks like land acquisition and completion of a few clearances. Additionally, those project which are working have issues around cash flows due to growing instances of litigations, he said.