One of the major capex spenders in India is the GOI. From laying roads and bridges, to erecting buildings of national importance, to constructing railway lines and all other needs of the logistics industry, the GOI is a big spender. The data on the capex spending on projects is included in the ‘Government Accounts’, the structure of which is shown in Figure 1.

Amongst the many heads of receipts and expenditures, the one that is of significance to the economy, in terms of promoting economic activity related to manufacturing, is contained under the head ‘Capital Accounts’. While the others also contribute to the economy, this specific account contains details of the capex spent every year in boosting and promoting manufacturing and related economic activities. For example, logistics, which is closely linked with manufacturing, as also with movement of non-manufactured goods (such as, agricultural goods) too. This head consists of many sub headings under which capex is incurred annually. For our study, we have selected the following:

• Capex of Energy
• Capex of Industry and Minerals
• Capex of Transportation 

These three headings cover most of the activities that, in one way or the other, affect manufacturing. Energy relates to setting up of power plants or coal plants etc., industry and minerals includes development of mines, and transportation includes roads, bridges, shipping and railways. The capex incurred by the government plays a role in supporting and promoting manufacturing. The capex is spent on projects undertaken by each concerned ministry, in a time bound manner.

While there are many other schemes, like the PLI, Make in India, special funds for specific industries such as electronics, we are more concerned with those schemes where project management holds the key to the coming into stream of facilities so created. For example, new railway lines, connecting new places hitherto unconnected, new roads/ highways, new ports, new electric power plants – both fossil and non-fossil based – are all created through project management activities. 

Large private and public sector companies are involved in these projects. For example, Tata Projects, L&T, Shapoorji Pallonji, Afcons, ICC, and many others are deeply involved in building assets which become productive, to push the economy forward. Quite naturally, the quantum of funds deployed, as well as the timely completion of work under budget are key variables which will determine the ‘timely’ success of these large projects. Typically, these projects include work in remote locations, acquisition of large tracts of lands already occupied/ other unoccupied lands, involvement of many workmen as well as engineers and other trades, and large outlay of capital. These projects are characterised by the involvement of many agencies, both governmental and non-governmental, and many step-wise approvals by the clients, which usually are government ministries. 

The Infrastructure and Project Monitoring Division (IPMD) of Ministry of Statistics and Programme Implementation (MoSPI) reported that the number of projects delayed is almost twice the number of projects on schedule for the country. It was also reported by IPMD that of the total delayed projects (as of Nov’21), 16.6% of the projects have been delayed in the range of one to 12 months, 20.9% in the range of 13 to 24 months, 39.2% in the range of 25 to 60 months while 23.3% projects have been delayed over 60 months. In an update provided, the same agency reported that as many as 431 central sector infrastructure projects, each entailing an investment of Rs 150 crore or above, were hit by cost overrun of more than Rs 4.80 lakh crore in January 2024. 

MoSPI, which monitors infrastructure projects worth Rs 150 crore and above, out of 1,821 projects, 431 reported cost overrun and 780 projects were delayed. “Total original cost of implementation of the 1,821 projects was Rs 26,09,679.38 crore and their anticipated completion cost is likely to be Rs 30,90,136 crore, which reflects overall cost overruns of Rs 4,80,456 crore (18.41 per cent of original cost),” the ministry’s report for January 2024 said. Out of the 780 delayed projects, 194 have overall delays in the range of 1-12 months, 187 have been delayed for 13-24 months, 284 projects for 25-60 months, and 115 projects have been delayed for more than 60 months. The average time overrun in these projects is 36.13 months.

In the light of these statistics, let’s examine the importance of project management to the economic development of India. Projects create assets, which are then used to produce goods and services, which then generate wealth. Time delays in projects not only lead to cost escalations, but also to delayed outputs. These have a cascading effect on the economy as a whole. For example, the delay in the establishment of a new seaport leads to loss of cargo revenue, cost increase, possibly more expenses in sourcing materials which would otherwise have been routed through the port. 

The success of a project depends on a variety of factors. According to the Project Management Book of Knowledge (or PMBOK), there are five stages in a project. These are: initiation, planning, execution, monitoring and control and closure. Resources deployment is the highest during the execution and monitoring phases, while the planning and initiation phases involve research and study-based activities. Obtaining management approvals for the project is crucial, especially for large outlay projects. However, the main resource needed for the successful completion of a project is human, and it is in the third stage, during which, usually, contractors are deployed. Productivity, cost, availability are the key issues. In modern project management practices, software based approaches along with AI based interventions, like BIM and Power BI, and many more such tools, are making things better. The PMGSS (PM Gati Shakti Scheme) is a remarkable example of such an approach, especially in the first two stages. 

In order to visualise the weightage of expenditure by the GOI to projects, we have made use of the data source shown in figure 1, and described in the para following that figure. Table 1 shows the extent of expenditure actually incurred in projects in India in the period.