India's Core Sector Projects Delayed by Government Bottlenecks

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Researched by Industrial Info India (Delhi, India)--Although India is expecting huge growth in its core sector in the coming decade, many projects are facing delays because of the tedious processes of environmental clearance and land acquisition. This underlines the need to streamline these processes and institute better coordination between various government agencies. These delays can directly affect the growth prospects in core sectors such as steel, mining, petroleum, roads and power.

Estimated investments totaling more than $45 billion have been held up due to bottlenecks in clearances and land acquisitions. About 660 million tons of coal is lying unused as the Ministry of Environment and Forests (MoEF) has defined 203 coal blocks to be in the 'No Go' areas. About 45 projects of Coal India Limited (Kolkata, West Bengal) have been delayed for similar reasons. In November 2010, MoEF stated that progress on all thermal power, steel and sponge iron projects will be deferred until environmental and forest clearance for coal supply sources are provided.

In the cement sector, upcoming projects for companies such as Binani Cement Limited (Mumbai) and Lafarge India Private Limited (Mumbai) have been delayed. Binani Cement is awaiting clearance from the government for its 2.5 million-ton-per-year cement plant in Gujarat. Construction on Lafarge India Private Limited's plant in Himachal Pradesh has been delayed until 2012.

In a recent session of India's parliament, Environment Minister Jairam Ramesh said that 286 projects in various sectors, including construction projects, are awaiting environmental clearances. Ramesh said a number of steps have been taken by the ministry to complete the task. About 42 power projects are awaiting clearance from the MoEF. In the power sector, a capacity addition target of 78,700 MW for the Eleventh Five-Year Plan (2007-12) has now been scaled down to 62,000 MW. Even this more modest goal is unlikely to be met, as only 23,000 MW of capacity has been added to date.

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