This forms almost 17 per cent of the amount (Rs 4,88,804 crore) being spent in projects which are currently under implementation. A major chunk of these stalled projects were floated by private sector promoters. A study conducted by the Centre for Monitoring Indian Economy (CMIE) has revealed that 51 mega projects in the private sector involving an investment of Rs 46,631 crore have been dropped. Similarly, 13 projects worth Rs 17,251 crore promoted by foreign companies were also stuck during the year.

While 13 projects involving Rs 13,347 crore investment by the government were stalled, seven joint sector projects were grounded due to various reasons. The major reasons cited for the stalling these projects are lack of adequate resources,failure in getting clearances, over-capacity in some sectors and environmental problems.

Three major steel projects were stuck during the year. The Rs 7,500 crore steel project of the Tatas in Gopalpur tops the CMIE list of shelved projects. The Tatas decided to shelve the first phase to manufacture cold rolled strips of 1.2 million tpa in December 1997. Further, the Tatas announced in April 1998 that the work on the project would not begin before 2003-04 as the progress of the project depended entirely on development of an all-weather port.

Similarly, Larsen & Toubro's Rs 7,000 crore steel project -- also in Gopalpur -- is also stuck. Mukand Vijaynagar Steels, promoted by Mukand, also put on hold its Rs 5,462 crore project due to the poor state of the steel industry and the weak economic condition in some Asian countries. With the steel industry expected to continue in the doldrums, these steel projects are unlikely to take off in the near future.

Significantly, several petroleum projects have alsobeen grounded. Bharat Oman Petroleum Corporation's Rs 7,070 crore refinery project -- promoted jointly by BPCL and Shell International was shelved following ``the government decision that with several refineries coming up in coastal areas, an in-land refinery would not be a viable proposition.'' Gontermann-Peipers of the Ispat group has shelved its Rs 5,400 crore petroleum project as the promoters are busy consolidating their projects in steel and joint ventures in telecom, power and mining.

Hindustan Oman Petroleum, promoted by HPCL and Oman Oil Company, which planned a Rs 5,102 crore project was grounded as the Omani firm backed out of the project due to fund constraints. The other major shelved projects include the Rs 2,000 crore car project of Ashok Leyland, Rs 2,750 crore petrochemical project of ONGC, Rs 2,700 crore international airport project of the Tatas and the Rs 2,500 crore export-oriented refinery of the Nagarjuna group.

In all chemical/petrochemical and infrastructure projects worth nearlyRs 50,000 crore have stalled during the year ended November 1998. Moreover, with the capital market in bad shape and interest rates hovering at a higher level, promoters will find it very difficult to raise resources to complete such projects. The corporate sector has been avoiding the capital market route fearing poor investor response. The industrial scenario is also depressing with the overall industrial growth for April-October 1998-99 -- based on official data on index of industrial production (IIP) -- falling to 3.6 per cent compared compared to 6.2 per cent recorded in the similar period of last financial year. Against this background , the number of stalled projects is likely to rise this year too.