PROJECT COMPLETION LINKED TO ELECTIONS

CMIE has put out a report stating that FY22 could end up breaking all record when it comes to project completion. Now that’s a huge achievement under the current circumstances but then again, its all thanks to the elections in UP.

The report states:

• FY22 is likely to end with project completions of the order of Rs.7 trillion v/s Rs.3.2 trillion (YoY).
• The highest value of projects completed so far is Rs.6.5 trillion in 2016-17. Fiscal 2021-22 could break that record.
• In Q3FY22, new productive capacities worth Rs.1.45 trillion v/s Rs.1.15 trillion (QoQ) were completed.
• Q3FY22 saw the highest project completion levels achieved in any of the past six quarters. (last fiscal second wave of covid took a toll)
• The average completion of projects per quarter during calendar year 2021 works out to Rs.1.12 trillion v/s average of Rs.1.4 trillion in a pre-pandemic quarter.

This is very good but what prompted this brisk pace of working? Politics of course!

30% of the Q3 projects completed were all in UP and all inaugurated with a lot of fanfare and media circus by our PM.

• First was the Rs.341 kms long, Rs.225 billion Purvanchal Expressway.
• Then the 257-km, Rs.98 billion Sarayu Nahar project.
• Third was the Rs.86 billion, 1.27 million tonnes of urea per annum FCI fertiliser plant at Gorakhpur in Uttar Pradesh.
• And fourth big project, getting the flag off from the PM was the Rs.26 billion Arjun Sahayak Irrigation project in Uttar Pradesh.

Common denominator is all – Uttar Pradesh. Does this all have to do with the upcoming elections in the state in Feb? Obviously! More than 36% of total project completion was from UP while under ‘no election’ period, it accounts for less than 10% of total completion of projects. 

Well, instead of ruing politics taking over economics, we would like to say that whatever be the motivation, we are glad that these projects were completed. We are happy that there are elections or else so much work would still get listed shamelessly listed under “incomplete.” As we say time and again, elections are good for economics.

Wish there were more elections because we would have then seen more projects taking off. By end of FY22, additional 345 projects worth Rs.2.5 trillion are scheduled for completion. Do you see than happening? Nah!