New projects completed by Indian companies have reached Rs 4,58,000 crore in 2015-16, their highest ever.
According to the Centre for Monitoring Indian Economy (CMIE), the turnaround follows two consecutive years of declines in project completion. The CMIE expects completed projects will rise in the coming quarters as companies mobilise resources and the government issues orders for new highways and railway projects.
CEOs said steps taken by the Modi government to revive investment climate has helped. “After the Supreme Court cancelled coal mines, we acquired a mine in Jharkhand. At the same time, Coal India started marketing its coal aggressively. This helped us restart our power project in Mahan,” said Sushil Maroo, executive vice-chairman, Essar Power.
The Essar, Jindal and GMR groups have projects that are on their way to generating electricity.
A large number of Indian companies defaulted on loans in the last three years when their projects were stalled over land acquisition and environmental clearance. The volatility in commodity and currency markets also affected projects.
Essar’s Mahan project was stranded for two years because its power plant was caught in an environmental controversy and it was unable to mine coal along with its equity partner, Hindalco. Both are now sourcing coal from Coal India to run their plants. A record number of projects in the country are stalled, accounting for 12 per cent of all projects being implemented. Economists said it would take some time for companies to press the pedal on fresh investments.