One July day in 2013, a group of officials sat around a large conference table in Room 264 of Vigyan Bhavan Annexe in Delhi. They were discussing the fate of the Delhi Aerocity, a 43-acre hotel hub near the Indira Gandhi International Airport. The project, originally scheduled to be completed for the Commonwealth Games in 2010, had been hanging fire because security agencies were prickly about runway-facing windows.
The deadlock was broken by a slight, bespectacled man chairing the meeting. This year, suggested Anil Swarup, additional secretary in the Cabinet Secretariat, let the prime minister deliver his Independence Day speech from behind a brick wall [instead of the usual glass enclosure]. If the PM is not safe behind a glass partition, he pointed out to his startled audience, nothing else would be. Point driven home, the Defence Research Development Organisation was asked to develop specifications for bullet-proof glass for the windows concerned. Within months, three hotels were ready to welcome guests.
Ten months later, 55-year-old Swarup, a 1981 batch IAS officer, has wrestled with far more complex issues holding up much bigger projects. The Project Monitoring Group (PMG), which he heads, has helped 153 projects—entailing a total investment of Rs 5.76 lakh crore—get going. These projects had been stuck for various clearances, some of them for years. “Given the brief he has, Swarup has done an outstanding job,” says Vinayak Chatterjee, chairman, Feedback Infra, an infrastructure consulting, engineering and O&M company. “It couldn’t have been easy, with the huge degree of political pressure, huge expectations created among domestic and international investors, the extremely short time he was given and the complex nature of the issues he had to deal with.”
The PMG was set up in July 2013 as a secretariat for the Cabinet Committee on Investments (CCI), which itself was a mechanism to unclog a colossal number of stalled investments, mostly in the infrastructure sector. By early 2013, it was estimated that projects with investments of Rs 22 lakh crore were logjammed. Project promoters began defaulting on debts, and banks started piling up bad loans. A study by Axis Capital shows that bad loans and stressed assets of banks rose from 3.4 percent of total infrastructure loans in FY2011 to 17.4 percent in FY2013. Worse, the scenario scared prospective investors away. Between FY2009 and FY2013, the study notes, new project investments showed a negative CAGR of 32 percent.
Industry had been flagging the issue for nearly three years, says A Didar Singh, secretary general, Federation of Indian Chambers of Commerce and Industry (Ficci). Individual industrialists too had taken up the matter with senior ministers and officials. The Planning Commission, says then Deputy Chairman Montek Singh Ahluwalia, was the first to ring the warning bell. The Commission had been tracking, since 2010, the quarterly progress of annual targets set by six infrastructure ministries. Reports on these were going to then prime minister, Manmohan Singh.
But it was only in 2012, after economic growth began to falter and leading industrialists from the power sector met Singh, that the problem was addressed seriously. Pulok Chatterjee, the then principal secretary to the PM, started holding regular meetings to push infrastructure projects. The Twelfth Five Year Plan recommended the setting up of a National Investment Approval Board (NIAB) headed by the PM to speed up large infrastructure projects. It suggested the Transaction of Business Rules be amended to allow NIAB, comprising key ministers, to give statutory clearances to projects more than a certain size.
At a National Development Council meeting in September 2012, former finance minister P Chidambaram pitched for a National Investment Board—the NIAB with a different name. In December, this became the CCI, with the mandate to clear projects worth more than Rs 1,000 crore. But the problem required more focussed attention than ministers meeting once or twice a week. It also turned out that decisions taken by the CCI were not being implemented. Chidambaram then suggested the PMG as a secretariat, which could do the groundwork for CCI meetings and resolve purely administrative issues, as well as monitor the implementation of CCI’s decisions.
Swarup was driving the Rashtriya Swasthya Bima Yojana—the health insurance scheme for the poor that has wowed international lending agencies—and was due to return to his Uttar Pradesh cadre. But he was given a year’s extension and put in charge of the PMG in July. The work was not entirely unfamiliar to him: He had done something similar in 1993 in Udyog Bandhu in Uttar Pradesh.
(This story appears in the 13 June, 2014 issue of Forbes India. To visit our Archives, click here.)
Another deserving feather in your cap sir. My comment (if you remember,sir) at the RSBY conference stands vindicated. Am so proud to have worked with you.
on Jun 10, 2014Development and implementation of RSBY project was tremendous at the time of Anil Sworup,But now it has slow down.
on Jun 10, 2014He is a great person, and writer of these articles have written these blog awesomely and made me addicted to read forbesindia.com
on Jun 10, 2014Sir, GR8, I m proud of u n lucky tht i hd worked in ur guidance.May GOD bless u Thanx n Rgds Dr.Saharan
on Jun 10, 2014