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Friday, 05 Apr 2019

74th Survey of Projects Investment reveals 3,642 projects were put on back-burner in FY15-19

The Projects Today Survey reveals that during the FY15-19 period, 3,642 projects worth Rs 16,59,353 crore were put on the back-burner by their promoters as against 3,791 projects worth Rs 10,94,945 crore in the FY10-14 period indicating an increase of 51.6 percent in toxic projects during the latest five-year period, FY15-91.

The high volume of projects-purging started in FY10-14, and continued in the next lustrum FY15-19. Though the phenomenon was observed across all major sectors during FY15-19, around 82 percent of the total projects investment vanished was in the Manufacturing and Electricity sectors.

On the positive note, the total quantum of stalled projects after hitting the recent high of Rs 1,95,795 crore in the first quarter of FY18 dropped sharply to Rs 12,477 crore in the last quarter of FY19. This is the lowest quarter figure recorded in the last 18 quarters. The total amount of projects shelved averaged at around Rs 85,000 crore between the first quarter of FY17 and second quarter of FY19.

The Manufacturing sector accounted for around one-third of the total project investment stalled during FY15-19. Within the Manufacturing sector, Food & Agro, Chemicals including Refinery, Cement, Metals and Electronics sectors were the major losers.

The last 10-year stretch has seen more number of mega steel projects being abandoned by private promoters than being commissioned or announced. The falling international prices, dumping by Chinese companies, land and environmental issues and inability to raise the required finance hampered these mega projects from materialising. The period also saw some of the well-known steel companies referred to NCLT by its lenders.

The high volume of shelving of Power projects started in the fourth quarter of FY15 and continued till the 3rd Quarter of FY19. During this period, on an average projects worth Rs 46,800 crore were shelved in each quarter. The trend was halted in the last quarter of FY19, where eight projects worth Rs 6,887 crore were shelved.

Projects in the Mining sector suffered due to court interventions and policy-related issues. During FY15-19, 216 mining projects entailing a total investment of Rs 30,534 crore were put on the back-burner by their promoters. Most of the shelved projects were proposed by Indian private companies.

Among the major states, Maharashtra and Odisha were the two states which accounted for around a quarter of the projects investment stalled in both the lustrums – FY10-14 and FY15-19.

Stalled Projects

 
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