Need proactive policy to clear infrastructure projects faster

The finance ministry is reportedly seeking easier lending norms for infrastructure projects that have been delayed for no fault of the promoters.

The plain fact is that as many as 378 infra projects, amounting to investment of over Rs 17 lakh crore, have been stalled for want of various clearances and approvals, and we clearly need proactive policy to speed up their implementation.

However, calling on the Reserve Bank of India to tweak the rules so as to allow refinancing of the big-ticket projects without treating them as restructured loans — which warrant higher provisioning by banks — would be akin to merely treating the symptoms and not the disease that appears to afflict policy implementation and follow through.

It cannot be gainsaid that umpteen projects are routinely delayed in the process of seeking environmental, forest and various other clearances, often for many months — even years.

And unless we have in place clear-cut norms for time-bound approvals, the delays and slippages would simply jack up costs right across the board and, what is worse, make entire projects unviable.

Hence the vital imperative to boost transparency in the project-approval process and have in place benchmarks and other criteria for prompt project evaluation. We need initiative and constructive decision-making in the domain of administration and the political executive, both at the Centre and the states.

The role of the latter is often critical for large projects requiring, say, extensive land acquisition and clearances.

In deserving cases, a measure of flexibility in provisioning requirements can mean finer rates of project finance. But as a general rule, it makes better sense to eschew the case-by-case approach, and seek to reduce uncertainty in the process of vetting and approvals.