Modi govt has done better than UPA on infrastructure but delays, cost overruns persist

One-fourth of central infrastructure projects are delayed under Narendra Modi’s NDA govt, while the number was one-third for Manmohan Singh’s UPA.

File image of Prime Minister Narendra Modi | Praveen Jain/ThePrint

New Delhi: Five years back, when the term of UPA-2 was coming to an end and the BJP was challenging its 10 years in power in the run-up to Lok Sabha elections, the talk was all about policy paralysis, incomplete projects and how Prime Minister Manmohan Singh’s government had been hobbled by corruption scandals.

Five years on, as the country prepares for another general election and the Narendra Modi government pitches for a second term, there is good news and bad news as far as infrastructure projects are concerned.

The good news is that central infrastructure projects have fared better under the Modi government than under the Manmohan Singh government. The bad news is that the Modi government has not been able to totally eliminate project delays and cost overruns.

According to data analysed by ThePrint, one-fourth of central infrastructure projects have been delayed under the NDA government while the number was one-third for Manmohan Singh’s UPA.

As of November 2018, India had 360 delayed central infrastructure projects, and total cost overruns of more than Rs 3.2 lakh crore, data available with the Ministry of Statistics and Programme Implementation shows.

The majority of the delayed projects were in sectors such as road transport and highways, railways, power, coal, urban development and petroleum.

However, the proportion of delayed projects as well as the amount of cost overrun as a percentage of total costs was much lower in the National Democratic Alliance government’s tenure, compared to the previous United Progressive Alliance government.

This despite the fact that the number of running central infrastructure projects as of November 2018 is 1,443, nearly double the 749 running projects in March 2014. The current anticipated completion cost of the 1,443 projects is Rs 21.5 lakh crore.

NDA era vs UPA era

Statistics ministry data shows that while one-fourth of the total projects are delayed under the BJP-led Modi government, more than one-third of the projects faced delays under the Congress-led Manmohan Singh government.

Cost overruns under the NDA government are at 17.5 per cent of total costs as against almost 20 per cent in the UPA government.

In addition, while nearly one-fourth of the total projects were on schedule as of November 2018, only one-fifth of the total projects were on schedule as of March 2014, suggesting that the Modi government’s track record has been better than its predecessor in terms of implementing infrastructure projects.

In absolute numbers, though, the delayed projects and the amount of cost overruns are higher in the NDA government’s tenure compared to the UPA’s.

A break up of the current cost overruns show that railways projects have been the biggest culprit, with the anticipated cost increasing manifold compared to the original cost in many projects. Power, coal and road transport and highways are some of the other sectors in which projects are seeing huge cost overruns.

Under both governments, about half the existing infrastructure projects did not report any commissioning dates.

Why pace has picked up 

Asked about these numbers, Abhaya Agarwal, partner at consulting firm EY India, said: “One of the reasons why the pace of infrastructure project completion has improved is because of this government’s focus on clearing the backlog of infrastructure projects that it inherited at the time of coming to power.

“There has been a massive improvement in the roads and railways sector, though not much in power,” Agarwal said.

“Environmental clearances and land acquisition were the two biggest roadblocks. But now the National Highways Authority of India has started devoting more time to land acquisition. The environmental clearances are also faster.”

Data shows that the lack of initial planning and feasibility studies remains a problem, and Agarwal added that going forward, the focus has to be plan well ahead before embarking on projects.

BJP can’t be believed on data: Congress

The Congress responded to the numbers by saying that the BJP can’t be trusted on its data.

“NDA’s numbers are always difficult to believe. They have been always fudging numbers, be it on GDP growth or jobs,” said Rajeev Gowda, Congress’ Rajya Sabha MP.

“Even the way the progress or achievement of infrastructure projects is calculated is changed to make the statistics look more favourable,” he said, adding that while usually the kilometre of roads constructed is calculated as the distance between the starting point and the end point, the NDA even takes into account the multiple lanes built to inflate the kilometre of roads built.

The BJP countered that it has made considerable progress even on projects that were in limbo under UPA rule.

“The NDA had to sort out two-three legacy issues to restart stalled infrastructure projects,” said Gopal Krishna Agarwal, national BJP spokesperson. “Roadblocks in environment clearances, failure to achieve financial closure and need for multiple permissions were plaguing infrastructure projects under the Congress government,” he added.

“The NDA has managed to resolve many of these issues, and with constant monitoring by the prime minister, more than Rs 9 lakh crore of projects have managed to clear the hurdles,” Agarwal said, adding that the focus has been for better inter-state and inter-departmental cooperation. 

He also said that the Modi government has managed to successfully resolve the bad debts issue of banks, freeing up funds for lending to infrastructure projects.