Narendra Modi govt to modify UPA's brainchild PMG, give more teeth

Written by Raj Kumar Ray | New Delhi | Updated: Jun 6 2014, 18:31pm hrs
Infra projectsProject Monitoring Group (PMG) coordinate with line ministries to expedite the required clearances for stuck projects.
The project monitoring group (PMG), set up by the earlier UPA government, may be overhauled into a stronger institution to ensure not just clearance of stalled projects but also to streamline approval processes and suggest policy changes to ensure economic activity picks up.

While the present mandate of PMG, which operates as a division under the cabinet secretariat, is to coordinate with line ministries to expedite the required clearances for stuck projects, sources said the new NDA government wants the PMG to go beyond that. In fact, the government is thinking of revamping the entire project clearance mechanism. "The PMG could be morphed into a different institution. Chances are it will be strengthened," an official told FE, adding the division could continue to remain under the oversight of the cabinet secretariat. It may act as a nodal body that synchronises clearances with similar bodies at the state level.

Already, PMG has been asked to gauge actual investment and production from the projects already cleared so far. "The message has been that we should go beyond clearances and find the actual economic activity production of goods and services, power generation after the clearances," said the official.

Since 2013, PMG has facilitated clearance of 150-odd projects involving Rs 6 lakh crore of investment. Despite this, the investment cycle has not seen any upswing and GDP growth remained subdued at 4.7%, a shade higher than the decade's slowest pace of 4.5% recorded in 2012-13.

Not to forget, there are another 283 projects listed in the PMG which have locked up close to Rs 14 lakh crore of investment due to delay in clearances. Earlier, the department of financial services (DFS) under the finance ministry was entrusted with the job of tracking investment in projects cleared by the cabinet committee on investment and PMG. But DFS has failed to track that through banking channels. PMG has now asked line ministries to seek views of companies on investment details the cost and investment made so far apart from the date of commercial operation, physical output and whether there are any issue that remains "unresolved".

In addition to project monitoring, the PMG has been asked to firm up views from line ministries on what policy issues are impacting project execution critically.