Investments in new projects fell 46 % to Rs2.1 trillion in FY'12: RBI
28 Aug 2012
The Reserve Bank said growth slow down that started last financial,when GDP growth fell to a nine-year low of 6.5 per cent led primarily by a near 50 per cent dip in new investments in large projects.
''Envisaged total fixed investment by large firms in new projects, which were sanctioned financial assistance during FY12, dropped by a whopping 46 per cent to about R2.1 trillion from R3.9 trillion a year ago,'' according to the FY'12 RBI annual report.
The drop was led by the infrastructure and metals sectors, according to the recently released report. ''Envisaged investment in infrastructure declined by 52 per cent to Rs1 trillion in FY12 from R2.2 trillion in FY11, led by the power and telecom sectors,'' said the report, as it collated data from banks and financial institutions.
While investment in the telecom sector had dried up, investment in roads, ports and airports had also slowed down sharply, it added.
Gross bank credit to infrastructure outstanding as of April 2012 stood at Rs6.2 trillion, but the flow of bank credit to the sector has decelerated, due to policy delays and higher interest rates, the report noted.
Data on sector-wise gross deployment of bank credit showed that its year-on-year growth had fallen to 14 per cent in FY12 as against 38 per cent growth in FY11.
