‘Revival of stalled projects will kick-start growth’

Economy can be revived and jobs created only if stalled works are taken up, says R. Shankar Raman.B. JOTHI RAMALINGAM

Economy can be revived and jobs created only if stalled works are taken up, says R. Shankar Raman.B. JOTHI RAMALINGAM  

Engineering and construction major Larsen and Toubro (L&T) said that if the government is able to revive stalled projects, it will kick-start growth and create over one lakh jobs.

There have been various delays in the government in awarding big contracts, that can kick-start the economy and revive growth.

Asked about the reported delays in the government awarding major contracts, L&T’s MD & CEO S.N. Subrahmanyan told The Hindu, . “It’s not moving as fast as it should. There are various reasons. The government has got a lot of feedback on many of the projects that are not being taken up due to issues such as right of way and public interest litigation The government is trying to re-arrange them to see that all issues are sorted out before they are offered for bidding. [The] system works like that, so it’s not correct to blame the government for everything.” EPC orders in roads have dried up compared with the last year.

“Last year also, the orders came in the second quarter. NHAI also has budgetary allocations. NHAI will have to find ways to get the money,” said Mr. Subrahmanyan.

L&T is looking at getting Rs. 15,000 crore of the Rs. 1 lakh crore worth of road projects to be awarded by the government this year.

L&T Group CFO R. Shankar Raman said the economy can be revived and jobs created only if government revives stalled projects.

‘Lots of halted projects’

“There are lots of projects which have been halted midway. They just need to be put back on track. My guess is at least 1 lakh people will get employment if you are able to release these projects, which are held back for some reason or other. Second, the government has to prioritise the allocation of funds to projects, contractors and vendors to get the circulation back. It’s important that the government [increases] spends,” said Mr. Raman.

“There has to be rediscovery of belief in the credit system of the country. I think the ships are safest in the harbour but they are not built to stay in the harbour. Credit has to flow between balance sheets. There has to be confidence that credit decisions will be taken and supported,” explained Mr. Raman. “Today, we are sitting on Rs. 2 trillion of systemic liquidity surplus. The banks and financial institutions are sitting on extra credit and it’s important that they get diverted.

“NPAs are going to be a part of any credit delivery system, ” he added.

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