According to official data issued on Tuesday (28 May), the percentage of cost overruns in central government projects increased to a 12-month high of 20.09 percent in April from 18.65 percent in the previous month.
A total of Rs 33.2 lakh crore was the estimated cost of 1,838 projects, each valued at at least Rs 150 crore. This sum exceeded the initial cost estimate by Rs 5.6 lakh crore. In addition, compared to the preceding months, the percentage of delayed projects rose.
Of these projects, 514 projects saw a delay in their original cost, and 43% of them (792 projects) experienced a delay in their intended completion date. According to official figures, 29 new projects were started in April compared to the 61 finished ones.
The newly added projects were anticipated to cost Rs 1.3 lakh crore, while the finished projects in April came with a cost of Rs 46,649.7 crore. According to the research, the GDP expanded by 7.8% in FY24 and is expected to expand by 6.8% in the current fiscal year.
International organisations have identified the government’s emphasis on infrastructure development as a major growth driver, and this trend is predicted to continue in the upcoming year.
The average time to complete a project dropped from 36.04 months in March to 35.4 months in April, despite an increase in cost overruns. Nevertheless, 48% of the projects saw delays exceeding a two-year duration.
According to the government study, out of 1,838 projects, 54 of them had time overruns exceeding 50 months and cost overruns surpassing 50%. Of these projects, 54 percent contributed to the total cost overrun and 21 percent to the total time overrun.
Out of all the major industries, the railways had the highest rate of cost overruns in April (126.5%), with over half of its projects that the government had reported having cost overruns. The cost overrun ratio for the road transport and highways sector, which makes up almost 60% of the projects, was 23.7%.
Furthermore, government data indicates that time overruns occurred in over 10% of road construction and one-third of railway projects. India’s central infrastructure projects are grappling with massive cost overruns and delays, with the latest reports indicating an escalation of ₹5.6 lakh crore beyond the original estimates. The delays, spanning across railways, highways, power, and urban development, are affecting economic growth and resource allocation.
Scale of the Overrun
According to data from the Ministry of Statistics and Programme Implementation (MoSPI), which monitors central projects costing ₹150 crore and above, nearly 400 out of 1,800 ongoing projects have significant cost escalations, while over 800 projects are running behind schedule.
The total original cost of these projects was estimated at ₹27.31 lakh crore, but due to delays and price escalations, the anticipated cost now stands at ₹32.91 lakh crore—a 20% increase.
Reasons for Cost Overruns and Delays
The delays and cost increases are attributed to:
Contractual and legal disputes – Issues between contractors and government agencies leading to stalled work.
Land acquisition hurdles – Slow bureaucratic processes and compensation disputes.
Regulatory and environmental clearances – Lengthy approval procedures delaying project execution. – Rising costs of steel, cement, fuel, and other construction materials.
Supply chain disruptions – Shortages of raw materials, labor, and logistical challenges. Rising costs of steel, cement, fuel, and other construction materials.
Group Media Publication
Construction, Infrastructure and Mining
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