Govt seeks better coordination for infrastructure projects

The finance ministry asked the Reserve Bank of India (RBI), public sector banks and other financial institutions on Tuesday to put in place a coordination mechanism to expedite implementation of large infrastructure projects that have been held up so that investment picks up momentum.

As many as 85 large infra projects in power, steel, highways and port sectors were reviewed at a meeting chaired by financial services secretary Hasmukh Adhia with RBI deputy governor SS Mundra, special secretary in the power ministry RN Choubey and heads of PSBs, REC and PFC.

These projects involve investment of Rs 3.51 lakh crore of bank funding and of these, four per cent have turned into non-performing assets for banks.

The main purpose was to understand the various reasons for stress in some infrastructure projects and also to put in place a coordinated mechanism for dealing with the stressed projects, Adhia told the media after the meeting.

Adhia added that factors such as delay in approval and land acquisition, finalisation of power purchase agreements, lack of fuel availability/linkages for power projects and coal linkage issues have led to stress in infrastructure projects.

"This is a preventive step as all the problems are common to many of them and we want to address those common problems by intervention of policy measure by the ministry or some collective measure by banks," Adhia explained.

The banking sector was represented by 13 members, including State Bank of India chairperson Arundhati Bhattacharya, Indian Banks Association chief TM Bhasin, IDBI Bank's MS Raghavan.

The meeting comes in the backdrop of some corporates complaining that despite the best efforts at the government's end, no work is happening at the ground level, which was reflected in the near-flat growth in corporate loan disbursals by banks.

Mundra said some of the issues that were discussed related to inter-ministerial clearances. Discussions were held around the regulatory prescriptions and expectations.

"So, the RBI will certainly examine all those issues within the over-arching regulatory framework."

Choubey told reporters that to help discoms grow the network and cut down losses, the government has launched two schemes.

One of the schemes is meant for rural areas while the other is for urban areas.