India Inc: Investments Drop to Lowest in 14 Years
Compared to last year, there is a 55 per cent fall in fresh investments.
The Centre for Monitoring Indian Economy’s (CMIE) data reportedly revealed that fresh investments in the December 2018-ending quarter in the country had slumped to a 14-year low.
Livemint reported that in the December-ending quarter, new investment projects worth Rs one trillion were announced. This is around 53 per cent less than the new investment projects announced in the September-ending quarter, in which projects of a little over Rs two trillion were announced. As compared to the December quarter of financial year 2017-18, in which new investments of around Rs two trillion were announced, there is a reduction of about 55 per cent.
Private sector worst-hit
The CMIE report further states that in the private sector, investment projects for December 2018 quarter fell by around 62 per cent and 64 per cent as compared to the September 2018 quarter and the December quarter of financial year, 2017–18, respectively.
In terms of the public sector, investment projects for December 2018 quarter declined by 37 per cent as compared to the September 2018 quarter. When compared to December quarter of financial year 2017–18, the slump is about 41 per cent. Monetarily, public sector investments for December 2018 amounted to merely Rs 50,604 crores, the lowest since December 2004.
The slump in investments is reflected in the growth of the rate of stalling. The rate of stalling is calculated by measuring the value of implementation of projects over a period of time and comparing them. Power and manufacturing sectors reportedly are worst-hit. The power sector accounted for 35.4 per cent of all stalled projects and manufacturing accounted for 29.2 per cent.
Given the Narendra Modi-led Bharatiya Janata (BJP) government came to power on the promise of economic growth and development, the poor performance of several economic indicators does not bode well for the party which has already suffered a massive defeat in the 2018 assembly elections.