A TURNAROUND AHEAD?
The government isn’t oblivious to the issues and even
started waiving approval requirements for certain
levels of foreign direct investment, which fell from
US$36.5 billion in 2011 to US$24 billion in 2012. To
help stanch the economic bleeding and spur consumer spending, the government has also cut taxes
on transportation, technology and capital goods.
“The outlook for the Indian economy is now
looking significantly better than it did in mid-
2013,” says Dr. Sinha.
With the landslide election of Prime Minister
Narendra Modi and his Bharatiya Janata Party in
May, some economists revised their forecasts for
“Since 2009, the number of stalled projects has
been rising,” says Sunil Kumar Sinha, PhD, princi-
pal economist and director, public finance, India
Ratings & Research, New Delhi, India. Dr. Sinha
says six sectors—electricity, roads, telecom, steel,
real estate and mining—account for about 80 per-
cent of all stalled projects.
“Any project that requires government approval,
especially for land use, faces long delays,” Dr.
In many cases, that has translated to a lack of
investor confidence, which leads to palpable consequences for Indian infrastructure projects—and the
economy as a whole.
US$110 billion in infrastructure projects has been stalled
because of India’s bureaucracy, according to a 2013 report by a
consortium of state-run banks.
The harbor of Mumbai, India