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India clears $27 bn for power, other projects to spur economy

India clears $27 bn for power, other projects to spur economy

India's cabinet has cleared 36 infrastructure projects worth more than $27 billion

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By AAP 27.08.2013

India's cabinet has cleared 36 infrastructure projects worth more than $27 billion -- including 18 power projects -- to try to jumpstart economic growth and restore investor confidence, the finance minister announced Tuesday.

The clearance was given by the Cabinet Committee on Investment headed by Prime Minister Manmohan Singh, and formed in late December to fast-track approvals and ease bottlenecks that hamper growth.

The petroleum and natural gas projects, valued at 830 billion rupees ($12.6 billion), are urgently needed to reduce a crippling electricity shortfall and help power Asia's third-largest economy.

The other projects cleared include those in the railway, roads and other sectors, with a total value of 1.83 trillion rupees ($27.8 billion), said Finance Minister P. Chidambaram.

"A number of projects had stalled and the message is we're very keen to to get the investment cycle restarted again," Chidambaram told a news conference, without identifying the projects by name.

"Now the investment cycle has started, it will gather pace -- bottlenecks are being cleared," he said.

The committee has cleared investments in a string of energy and other projects since it was set up.

The shortage of power is cited by economists as one of the factors that has slowed the pace of India's economic growth to a decade-low of five percent.

India's creaky transportation network has also hurt industrialisation efforts.

Chidambaram's announcement came as India's currency touched a new lifetime low of 66.07 rupees to the dollar amid foreign investor alarm over the nation's record current account deficit -- the broadest measure of trade -- and a sharply slowing economy.

The rupee's fall was greased by parliamentary approval late on Monday of a $19 billion plan to supply cheap grain to the poor that investors fear will increase the burden on India's already stretched public finances.

Power projects have been delayed due to regulatory, environmental and land acquisition hurdles along with a lack of fuel supply agreements. The Congress-led government has been accused of policy paralysis in the wake of a string of graft scandals which has left them on the back foot as the economy slowed.

Chidambaram added the government hoped to address industrial land acquisition problems with a long-awaited land bill due to be brought before parliament this week.

The legislation, replacing a more-than-century-old law framed by India's former British colonial rulers, will better reward landowners whose property is bought for industrial development, but business says its provisions for acquisition are too costly.

The government has set a target of investing $1 trillion in roads, ports, power and other infrastructure up to 2017 to spur development and ease widespread poverty.

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