India Inc holds its breath as Maharashtra puts mega projects 'under review'

Maharashtra government's decision to 'review' all major infrastructure projects in view of a major financial crisis suffocating the state has sent shockwaves in India Inc., though nobody has commented openly so far in the country's commercial capital.

As Chief Minister Uddhav Thackeray ordered the reappraisal based on broad parameters like availability of finances, long-term financial viability of projects, their priority and relevance, state minister and NCP leader Jayant Patil made a shock disclosure that the state was in the grip of a Rs 4.71 lakh crore debt, plus commitments of another Rs 2 lakh crore on 'mega-infra projects' made by the previous government.

As the opposition Bharatiya Janata Party (BJP) screamed foul, an official said that at least nine of the grandiose projects were worth a staggering Rs 10.28 lakh crore, while the other 1,200-plus smaller projects were worth around Rs 8 lakh crore -- taking the total to nearly Rs 18 lakh crore.

"With a total debt of Rs 6.71 lakh crore and another Rs 18 lakh crore to be spent, the crucial question before the cash-strapped government is where will all this money come from," the official asked.

Meanwhile, Uddhav Thackeray has demanded that since Maharashtra contributed nearly half the total tax revenues to the Central exchequer, the Centre should 'waive' off (the state's contribution) for two years, which could help it wipe off all its debts at one shot.

This demand has been a matter of debate in political circles since the past few years, but to Uddhav Thackeray's credit, no past Chief Minister showed the courage to utter it publicly.

Some of the big-ticket projects include Mumbai-Ahmedabad Bullet Train, the world's biggest petrochemicals complex at Nanar, the Mumbai-Nagpur Expressway, several Metro Rail projects in Mumbai and other cities such as Pune and Nagpur, with plans for more.

A majority of these projects are being executed by the Centre and/or the state through departments like the railways, shipping, highways, airport, power, irrigation and other state agencies as well as some private players.

The much-touted Bullet Train project -- Prime Minister Narendra Modi's pet offering -- has been termed a 'White Elephant' by NCP Minister Chhagan Bhujbal while AICC Secretary Sanjay Dutt has called it a 'misplaced priority' over other critical projects.

Seeking to allay India Inc.'s apprehensions, state minister and Congress leader Nitin Raut said that review of all such projects will be done "in a judicious manner" after considering the concerns of all the stakeholders.

"Those found unviable will be deferred, while those which truly benefit the state shall be prioritised. But everything shall be only after (the ongoing) discussions with the industry and all others involved in them. We are a pro-development government, but don't want to waste scarce resources in view of the state's financial health," Raut told IANS.

On his part, Uddhav Thackeray has also made it clear that "no project" is being cancelled though some could be postponed due to resources crunch, reassuring India Inc. to some extent.

The Chief Minister has stopped work on the Mumbai Metro 3 Car-shed in Aarey Colony, while a December 5 Urban Department notification ordered all districts/civic bodies not to issue green signals for projects, especially those in Urban Renewal, till further notice.

"This Car-shed stay is illegal. The Chief Minister says not a single leaf will be removed for development. What about the Wadala-Thane Metro 4 which needs removal of 3,500 trees," asked state BJP Vice President Kirit Somaiya.

Ex-BJP Water Supply & Sanitation Minister Babanrao Lonikar attacked the Urban Department's move, saying the National Rural Drinking Water Supply Scheme is partly funded by the Centre.

According to the Ministry of Finance's Department of Economic Affairs' database of infrastructure projects in India (Maharashtra), there are a total of 1,212 projects worth nearly Rs 18 lakh crore, including top 9 mega-infra projects alone worth Rs 10.28 lakh crore.

Of these, 542 projects completed are worth Rs 8,172 crore, 623 in pre-construction stage are worth Rs 2.42 lakh crore, and out of the total 1,212 projects, the top 25 mega-projects listed are worth Rs 12.07 lakh crore.
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