CMIE Data: Implications for the Economy

CMIE Data: Implications for the Economy

Question : Latest data from Centre for Monitoring Indian Economy has positive repercussions for the economy. Discuss.

Positive Implications

- Centre for Monitoring Indian Economy has offered positive inputs for the government

- It holds that the value of stalled projects in the nation has fallen to INR 79,3000 crore at the close of June quarter as against INR 2,00,000 crore

- From a high of 8.4% of the GDP in the quarter closing March 31, 2014, stalled projects fell to 6.6% in the June 2015 Quarter

- The number of projects being implemented rose by 8.4% in the quarter closing June 30

- Deutsche Bank report has also said that from Jan-March there has been a pickup in clearances for projects, especially those in the coal and mining sector

- Increase in capital expenditure by the GoI during April-May in the infrastructure has been noted as well

- Rail and road projects which had been mainly stalled were accounting for half of the total projects which were stalled

- These have received fresh impetus in recent times as per CMIE dat

Negative Implications

- Numerous stalled projects on account of environmental delays and land acquisition issues has had a cascading impact on the Indian economy

- It has aggravated stressed assets and constrained the bank’s ability for lending further

- According to CMIE project, at an absolute level, number of projects announced in Q1 2015-2016 has fallen by 53% compared to the previous quarter

Facts and Stats

- New projects announced at April-June 2015 were pegged at INR 1.2 lakh crore

- Rating agency CARE found that only a fraction of the investments committed in the last 5 years have actually occurred in India

- Investments made last 5 years stood at INR 2.71 lakh crore wherein INR 31.93 lakh crore investments were proposed across 11,784 projects in the country.