FIEO/PUB/PR /65/12 - June 25, 2012
Announcements to put stalled projects on track: FIEO Chief
Mr. M Rafeeque Ahmed, President, Federation of Indian Export Organisations(FIEO) while commenting on the announcements made today stated that allowing ECB’s in manufacturing and infrastructure would be positive step in line with the National Manufacturing policy. Requirements in infrastructure of $ 1 trillion in the 12th plan have also necessitated the announcement to bridge gaps in financing of major projects.
FIEO Chief stated that earlier cap of $ 15 billion in G-Sec has also been raised to $ 20 billion and would create a necessary environment for investments and would enable the rupee to recover lost ground atleast partially. Rupee had earlier slumped to 57.17 on Friday and had recovered to 56.58 today in anticipation of announcements. The announcements have also created a certain degree of buoyancy in the stock markets, it is hoped that rupee would also show some improvements.
FIEO Chief elaborated that in 2010 aggregate debt under CDR related to infrastructure sector at Rs. 5,166 crores while in 2012 the figure stands at Rs. 16,774 crores. Given the announcement and necessary cash flow that would ensue from the same easier CDR norms may be put in place so as to put projects on track. Also stalled order book for projects which were down to $ 75 billion from $ 110 billion as a result of stalled projects also resulting in a de-growth of 27% in capital goods / equipment order book linked to infrastructure sector as a consequence which would hopefully be put on track.
Stranded assets (shelved + delayed + non-operational ) of approx. 30,000 Mw of coal-fired plants on account of fuel-linkage can now hoped to be resolved which were stalled due to compensation issues related to imported coal.