One of the factors that resulted in a landslide victory for the Narendra Modi-led BJP government during the 2014 general elections was the promise of growth and development. As a corollary, the UPA government was ousted from power for precisely failing to deliver on this front.
Now all eyes are on the Modi government to see if they are on track to deliver the big promises they made. Some indicators do give a hint that the new central government is indeed serious about nudging the economy out of the ongoing slowdown and unleashing the untapped growth potential of the Indian economy.
If you recall, all through the slowdown we have been hearing that a lot of projects have been stalled or delayed because of excessive red tape, land acquisition issues and so on.
The project monitoring group in the cabinet secretariat has been assigned the task of resolving the red tape issues and reviving public investment projects. As per an article in The Economic Times, this group is monitoring about 332 public sector or public-private partnership projects worth Rs 10.2 trillion that have been stuck due to bureaucratic hassles. The Modi government has asked the Cabinet Secretariat to speed up implementation of more than 135 public investment projects worth Rs 2.5 trillion by resolving red tape hurdles.
It is noteworthy that so far the project monitoring group had been focused on resolving the issues facing investments of over Rs 10 billion or those of strategic nature. Now the bar has been removed. Even smaller public investment projects will pass the scanner of the Cabinet Secretariat.
As per the Economic Survey, the sectors with the highest 'stalling rates in recent quarters' were mining, electricity and manufacturing. It estimated that if the issues facing the top 100 projects by value were addressed, 83% of the country's stalled projects would be resolved.
In our view, these initiatives by the government are indeed in the right direction. If the government manages to resolve the red tape issues and revive the investment climate in the economy, India's economy stands a strong chance to go back to the sunny days of high single-digit growth rates.