Policy push trims infra cost overrun
The launch of PM GatiShakti, a GIS-enabled National Master Plan for multi-modal connectivity and National Logistics Policy helping mitigate unnecessary cost build-up
From 22.02% of the originally approved costs in March, it came down to 19.86% in May, 19.48% in June, 19.46% in July, and 19.08% in August, official sources told Bizz Buzz
Fixing Gaps
♦ Rigorous project appraisal
♦ Computerized monitoring system
♦ Revised cost committees
♦ Regular review of the infra projects
♦ Projects Coordination Committees
New Delhi: Cost overruns of infrastructure projects, which have been a bane for the economy for quite some time, have come down steadily since March this year. From 22.02 per cent of the originally approved costs in March, it came down to 19.86 per cent in May, 19.48 per cent in June, 19.46 per cent in July, and 19.08 per cent in August, official sources told Bizz Buzz.
In absolute terms, 19.08 per cent is Rs477,280.69 crore. The total original cost of implementation of the 1,762 projects of Rs150 crore or more was Rs2,501,400.62 crore. Currently, the anticipated completion cost is Rs2,978,681.31 crore.
Cost overruns with respect to the originally approved costs have had a chequered history. In March 2014 -that is, at the fag-end of UPA rule -it was 19.4 per cent. It went up to 20.02 per cent a year later. FY2015-16 was the best year in terms of fall in the percentage of cost overruns, as it was 12.52 per cent. By March 2017, it fell further, 11 per cent, making it the best month in the last nine years. Since then, however, the percentage had seen a steady rise till March 2023.
The turnaround has been the result of several measures taken by the governments, the sources said. These included rigorous project appraisal, a computerized monitoring system, setting up of revised cost committees in the administrative ministries, regular review of the infrastructure projects by the concerned administrative ministries, setting up of Central Sector Projects Coordination Committees in States under the Chief Secretaries concerned for removal of bottlenecks and for facilitating the speedy implementation of major projects.
The launch of PM GatiShakti, a GIS-enabled National Master Plan for multi-modal connectivity, in 2021 has also helped. The National Logistics Policy, launched along with PM GatiShakti, has also had a positive impact, the sources said.
