Process infrastructure projects faster, says CII
Apex industry body, the Confederation of Indian Industry (CII) has called for faster processing of infrastructure projects in the country.
It has suggested that the government should establish a National Infrastructure Facilitation & Monitoring Agency (NIFMA) in active partnership with the industry. The agency’s mandate would be to facilitate and monitor implementation of important infrastructure projects.
CII has also offered to be an active partner in setting up this agency. The suggestion assumes importance in the context of the ongoing financial downturn and its effects on the country’s economy.
Infrastructure projects in India are known to be delayed due to various bureaucratic procedures. It is essential to cut down the proverbial red tape and take the projects to the next level faster. “Some clearances are obtained after prolonged periods, thus adding to the overall cost and turnaround times of the project,” said Yashika Singh, head, economic analysis, Dun & Bradstreet India.
As pointed out by CII, despite the emphasis on infrastructure development, currently there is no single agency that can carry the responsibility of facilitating implementation of infrastructure projects in India. NIFMA can fill this space. “There is thus a need to identify 20-30 infrastructure projects of national importance and put them on fast track. This would instil confidence and push demand,” said Chandrajit Banerjee, director general, CII.
CII has proposed initiating a special drive to accelerate the process of awarding contracts and commissioning of new infrastructure projects. Harsh Shrivastava, senior vice president, Feedback Ventures, voiced the same concern when he said: “Because of the delay in getting clearances, it takes too long for a project to get off the ground.” It is thus essential that the project pipeline is cleared fast and quick decision making pending for approval with various ministries is called for.
“Since investments in infrastructure can play a counter cyclical role in an economic slowdown, everything necessary should be done to give a boost to and create an enabling framework for these investments,” said Banerjee. “Besides strengthening the supply side this has a huge positive spin off in terms of creating a crowding in of investments and hence demand,” he added.
The CII director general further suggested that NIFMA should be structured on a private public participation basis with a board having equal representation from both the industry as well as the government and should be headed by a prominent Infrastructure expert.
Another suggestion calls for the creation of a special window for refinancing infrastructure projects with the India Infrastructure Finance Co Ltd. Liquidity crunch and high interest rates have already caused serious concerns among infrastructure developers as well as investors.
“At a time like this when infrastructure projects are increasingly finding it difficult to carry on as well as reach financial closures due to non availability of funds and high interest rates, a special refinancing window would provide the much needed boost to this sector,” Banerjee said.
Construction Week India supports CII’s suggestion and believes that the creation of NIFMA will definitely encourage investments in infrastructure and drive further growth.