There have been various delays in the government in awarding big contracts, that can kick-start the economy and revive growth. Context:
- Many of the projects are not being taken up due to issues such as the right of way and Public Interest Litigation.
- The government is trying to re-arrange them to see that all issues are sorted out before they are offered for bidding.
- EPC orders inroads have dried up compared with the last year.
- NHAI also has budgetary allocations and will have to find ways to get the money
Main Features of the EPC Model :
- Under this system, the entire project is funded by the government.
- The EPC entails the contractor build the project by designing, installing and procuring necessary labor and land to construct the infrastructure, either directly or by subcontracting.
- Under the EPC model, the contractor is legally responsible to complete the project under some fixed predetermined timeline and may also involve scope for the penalty in case of time overrun.
- In EPC as all the clearances, land acquisition and regulatory norms have to be completed by the government itself and the private players do not have to get itself involved in these time taking procedures.
Way Ahead:
- There are lots of projects which have been halted They just need to be put back on track.
- At least 1 lakh people are likely getting employment if these projects are released, which are held back for some reason or other.
- The government also has to prioritize the allocation of funds to projects, contractors and vendors to get the circulation back. An increase in government spending is crucial.
- Credit has to flow between balance sheets.
- There has to be confidence that credit decisions will be taken and supported. NPAs are going to be a part of any credit delivery system.
Also read: Government To Ensure Labour Benefits For The Gig Economy Workers Indian Economy: Industrial Growth Shrinks In August
