The slow pace of land reforms will continue to result in project delays and rising costs, posing a downside risk for the road and rail sectors, Fitch Solutions said Wednesday.
“The Government’s land reform agenda has evolved in to a highly contentious issue in the country, as reform attempts were countered with fierce resistance from land owners and political opponents. Hence, with the 2019 elections in the horizon, we expect land reform to take a back seat as the BJP moves to address other pertinent issues such as raising agricultural wages,” Fitch Solutions, an affiliate of Fitch Ratings, said.
India’s poor track record in delivering projects on time, it said, can be seen from official Government data, with almost 50 per cent of road and rail projects in the five most populous states in the country being delayed by more than four years.
“A majority of the delayed projects are running above the budgeted costs — without land reforms at the federal level that would standardise land acquisition procedures across the country and expedite the acquisition process, the status quo is likely to persist,” it said. Read More