In an attempt to lift the construction sector from its current slumber, the NITI Ayog has decided to inject Rs. 40,000cr, benefitting the contractors and concessionaires of government projects that are under dispute. In this connection, the Aayog directed central public sector units to release 75% of the amount due to them to revive the sector, whereby, part of the money paid will be used to clear bank debt, which will also help reduce the stress on lenders struggling with bad loans. The push follows the government's decision on August 31 to release construction sector funds locked up in arbitration. NITI Aayog has written to ministries and departments to implement the decision involving 597 cases blocking Rs. 52,488-cr spread across central public sector enterprises including National Highways Authority of India, NTPC, NHPC and Indian Oil Corporation which are under arbitration or pending in court. Based on the instructions issued by the NITI Aayog, 75% of this amount is likely to be released to the contractors and concessionaires on furnishing the bank guarantees, NITI Aayog CEO, Amitabh Kant said, adding that the move would open the gateway for revival of the construction sector, which is the second-largest employment provider. The initiative is expected to release a substantial amount of liquidity for the construction industry, help them meet their debt obligations, encourage banks in taking care of their NPAs and release of resources for completion of stalled projects.
📅Published on:
09 September 2016
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