Chennai: The number of investment proposals in India saw the lowest number since 2004-05 in the previous financial year, which ended 31 March, a report by a think tank stated.
The Centre for Monitoring Indian Economy (CMIE) in its recent report has said this lowest figure of new investments recorded in 14 years added up to ‘a dismal’ Rs 9.5 lakh crore.
The report said last financial (FY18-19) year was the fourth consecutive year of decline in new investment proposals. ‘The estimate of 9.5 lakh crore will be revised upwards in the coming weeks. But, this is unlikely to change the fact that 2018-19 would be the year of very poor investment interest in India,’ said the report. The decline had begun in 2015-16.
According to the report, ‘A new and promising government in 2014-15 reversed this decline. Investment proposals shot up smartly in 2014-15 to Rs 21 lakh crore. Year 2015-16 was comparable with new investment proposal announcements worth Rs. 20 lakh crore.’
“But, this pick-up was short-lived and short of the earlier boom in terms of the total size of investments. India never regained the investments exuberance of the earlier boom period,” the report said.
“The share of private proposals shot up to an all-time high of 67.5 per cent in 2018-19. But, there is a somewhat bizarre twist to this record. One-fifth of the private sector’s investment proposals made in 2018-19 are already stalled,” it added.
The report also noted that the share of manufacturing has risen to 33 per cent, from 26 per cent in the preceding two years. Therefore, the share of services has declined from 51 per cent two years ago, to 39 per cent.
This decline in services sectors is due to drop in proposals for road sector said the report, adding that the fall in road projects alone account for half the fall in total new investment proposals in 2018-19.
According to the report, new investment proposals were robust during the five years from 2006-07 through 2010-11, as the average was Rs 25 lakh crore a year. By 2013-14, investments dropped to around Rs
The decline, thereafter, was steep and rapid as new investment proposals dropped to just Rs 10 lakh crore by 2013-14.