As the BJP’s Prime Ministerial candidate, Narendra Modi would often hit out at the Congress-led UPA government claiming that a “policy paralysis” had hampered the growth of industry in the country. He made a bunch of promises to India Inc vis a vis the fast-tracking of projects and creating an environment of “trust and leadership”.
However, three years into his term, his words ring hollow. Data from the Centre for Monitoring Indian Economy (CMIE) shows that the value of stalled infrastructure projects in the quarter ended September has increased to a whopping Rs. 13.22 trillion. This is the fifth quarter for which the number has shown an increase. This effectively means that 13% of the total projects under implementation are stuck behind the proverbial red tape. Out of all the projects stalled, it is the private sector that accounts for two-thirds of the value of total projects yet to see the light of day. The value of private sector projects stuck has been over and above 20% for the four straight quarters, reports LiveMint. Since March 2004, this is the highest value of stalled private sector projects as a percentage of the whole.
However, going by Finance Minister Arun Jaitley’s recent statements, it seems Mr. Jaitley has been living in a different country all this while. Mr. Jaitley recently claimed that there is no policy paralysis under his government. The numbers clearly tell a different story. He also claimed that his government had eased environment clearances. The CMIE data shows that the lack of environmental clearances, fuel and raw material problems and lack of funds are acting as main hindrances for Rs 4.94 trillion worth of stalled projects—40% of the total value. The high value of stalled projects has an impact on new project announcements. While the value of new project announcements in the quarter ended this September was Rs. 31,000 crore, the number is a pale shadow when compared to Rs. 1.79 trillion and Rs 1.69 trillion in the same quarter, 2016 and 2015, respectively. The numbers expose the much-touted “business-friendly” plank of the BJP and Mr. Modi. The revival of the stalled private projects is key to the economic activities picking up.
The numbers come at a time when the Modi government is already under a lot of criticism for what the Indian Economy has been reduced to, in the aftermath of the completely unnecessary demonetisation move and a hurried GST, weighing down on small businesses and traders. It seems this government’s “ease of doing business” rhetoric only translates to realities for a selected group of business groups.
It is time Mr. Modi woke up from his slumber and took concrete steps to jolt his government out of the policy paralysis it is in. India does not need a gloried political campaigner warming the seat of its highest office. It needs someone who understands the economy and is a just administrator.