Taking note of Finance Minister P ChidambaramÂ’s suggestion, chiefs of public sector banks (PSBs) and State-owned financial institutions on March 18, banks have begun the process of region-wise stock-taking of new and stalled infrastructure projects. The first meeting of bankers, organised by Canara Bank, was held in Bangalore last week.
Top representatives of major banks headquartered in the South, their large clients having projects in the region and top Finance Ministry officials were present at the meeting. Similar meetings would be held in Delhi, Mumbai and Kolkata. The stock-taking initiative on new and stalled projects comes at a time when growth has decelerated significantly.
IndiaÂ’s GDP growth at 4.5 per cent, in the October-December quarter of 2012-13, was the weakest in the last 15 quarters. According to Reserve Bank of India Deputy Governor HR Khan, infrastructure development facilitates economic growth and economic growth in turn increases demand for more infrastructure.
Thus, development of adequate and quality infrastructure is a necessary condition, if not sufficient, to maintain growth momentum in any economy. Finance Ministry estimates show that there are 215 projects, each with a project size of Rs 250 crore and above, that are stalled. Out of 215 projects, 106 are in the power sector, 79 in roads, 20 in iron and steel, and 5 each in cement and port sectors.
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