statesman news service
NEW DELHI, 5 OCTOBER: Recent reforms undertaken by the government in terms of fast track project approvals and enactment of the Land Acquisition Bill will help in reviving the investment cycle in the coming quarters, according to PHD Chamber of Commerce and Industry.
The chamber asserted that revival in new investment announcements during the Q2 FY 2014 is inspiring and is expected to continue in the coming quarters on various recent reforms undertaken by the government in terms of fast track project approvals.
There has been an rise in new investment announcements of 4 per cent from Rs 846 billion worth of fresh investments announced in the Q1 FY 2014 to Rs 881 billion during the Q2 FY 2014. Also 280 projects were announced during the Q2 FY 2014 with cement and steel sector witnessing an increase of 50 per cent and 40 per cent respectively in fresh investment announcements, it said.
The PHD Chamber hoped that the new land Bill will speed up the process of project implementation and push various PPP projects on the high road and attract investments from domestic and global stakeholders, going forward.
The government recently cleared 36 infrastructure projects worth Rs 1,830 billion that were stalled because of various regulatory concerns. Fast track approvals will perk up sentiments for more and more investments, the chamber added.
The power generation industry has recorded a healthy increase in new investment announcements during the Q2 FY 2014 with Rs 372 billion worth of new investments being announced as compared to Rs 92 billion worth of fresh investments announced in the Q2 FY 2013, it said.
However, the manufacturing sector witnessed a sharp drop of 22 per cent in new investment announcements during the Q2 FY 2014 over Q2 FY 2013, the PHD Chamber said. In an increasingly global environment, the sector continues to face structural constraints, such as inadequate, relatively inefficient and high cost infrastructure, high costs of borrowed funds, inflexibilities in labour markets and other institutional rigidities that inhibit the pace of industrial restructuring, it added.
The PHD Chamber said labour laws need to be revisited, especially in light of the evolutionary changes in the industry, its types, processes and problems.