New investment proposals in India at an 8-year low in Q3-FY'13: CMIE
06 Nov 2012
New investment proposals announced in the July-September 2012-'13 quarter stood at Rs58,494 crore, the lowest since the similar quarter of 2004, economic think-tank Centre for Monitoring Indian Economy (CMIE) has said.
Private sector net investment proposals accounted for Rs35,368 crore of the total while government proposals stood at Rs23,126 crore, CMIE said in its monthly review.
CMIE said the decline in investment proposals in the July-September 2012 quarter could be due to a wait-and-watch policy followed by investors in the wake of the rising government deficit and the Reserve Bank's policy measures aimed at curbing inflationary pressures.
However, the fall in September 2012 quarter was exceptionally steep, the economic think tank said.
The number and value of fresh investment proposals have been declining for the past three years, mainly because of the huge project pipeline built up since the capex boom in 2004-05, CMIE said in its review.
Investors have been holding back on further investments over the past three financial years. Investment proposals fell gradually to Rs16,60,000 crore in 2009-10, to Rs15,08,000 crore in 2010-11, to Rs10,30,000 crore in 2011-12 and further to Rs3,00,000 crore in the first half of 2012-13, CMIE said in its review.
The decline in investment proposals was evident across sectors, perhaps with the exception of steel, electricity distribution and road transport.
With huge underutilised capacity and several proposals in the pipeline, CMIE said a spurt in fresh investment proposals would be impossible in the near future.
