Cost Overrun in Indian Infrastructure Projects: Rs 5.18 Lakh Crore
By Rediff Money Desk, New Delhi Dec 16, 2024 18:32
India's infrastructure projects face a significant cost overrun, with 438 projects exceeding their original budget by Rs 5.18 lakh crore. Reasons include land acquisition, skilled labor shortages, and rising material costs.

Illustration: Dominic Xavier/Rediff.com
New Delhi, Dec 16 (PTI) As many as 438 infrastructure projects with a total cost of Rs 150 crore or above have shown a 62 per cent cost overrun amounting to Rs 5.18 lakh crore, Parliament was informed on Monday.
According to a written reply to the Rajya Sabha by Minister of State for Statistics & Programme Implementation Rao Inderjit Singh, the original total cost of these 438 projects increased to Rs 13.56 lakh crore from Rs 8.38 lakh crore.
As on November 1, 2024, a total of 438 of 1,747 projects on the monitor of the ministry reported cost overrun of Rs 5.18 lakh crore, registering an increase of 61.82 per cent, according to the data shared by the minister showed.
As reported by the project implementing agencies, the main reasons for the increase in cost of the projects are under-estimation of original cost, changes in rates of foreign exchange and statutory duties, spiralling land acquisition costs and shortage of skilled manpower/labour, the Minister said.
Other reasons affecting the original cost are "high cost of environmental safeguards & rehabilitation measures, changes in project scope, monopolistic pricing by vendors of equipment services; general price rise and inflation and time overruns," he said.
The Ministry of Statistics and Programme Implementation is mandated to monitor Ongoing Central Sector Infrastructure Projects costing Rs 150 crore and above on time and cost overrun, based on the information reported by the line ministries/ project implementing agencies on the online computerized monitoring system of the ministry.
According to a written reply to the Rajya Sabha by Minister of State for Statistics & Programme Implementation Rao Inderjit Singh, the original total cost of these 438 projects increased to Rs 13.56 lakh crore from Rs 8.38 lakh crore.
As on November 1, 2024, a total of 438 of 1,747 projects on the monitor of the ministry reported cost overrun of Rs 5.18 lakh crore, registering an increase of 61.82 per cent, according to the data shared by the minister showed.
As reported by the project implementing agencies, the main reasons for the increase in cost of the projects are under-estimation of original cost, changes in rates of foreign exchange and statutory duties, spiralling land acquisition costs and shortage of skilled manpower/labour, the Minister said.
Other reasons affecting the original cost are "high cost of environmental safeguards & rehabilitation measures, changes in project scope, monopolistic pricing by vendors of equipment services; general price rise and inflation and time overruns," he said.
The Ministry of Statistics and Programme Implementation is mandated to monitor Ongoing Central Sector Infrastructure Projects costing Rs 150 crore and above on time and cost overrun, based on the information reported by the line ministries/ project implementing agencies on the online computerized monitoring system of the ministry.
Source: PTI
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