During the calendar year 2008, India saw a record number of new projects being announced. In all 11,904 projects entailing a total investment of Rs.8,34,963 crore were announced in the country. Compared with 2007 statistics, this indicated a major mark up both in terms of number of projects as well as projects investment. The year 2007 had seen announcement of 6,893 projects worth Rs.3,52,428 crore. However, if we examine the data a little more closely, we find that the number of capital intensive projects dropped in the second half of the year.

Of the 5,657 new projects worth Rs.5,33,744 crore announced during the first half of 2008, private sector accounted for 3,167 projects worth Rs.3,51,403 crore. The picture changed dramatically in the second half. Of the 6,247 new projects worth Rs.3,01,219 crore announced during July – December 2008 period, private sector projects were only 2,512 worth Rs.1,76,167 crore.

As observed in the last couple of years, private sector dominated the fresh investment landscape in 2008, also. However, the dominance dropped sharply in the second half, following global financial crisis. As a result, the share of private sector in fresh investment dropped from 66 per cent in the first half of 2008 to 58 per cent in the second half.

Unwillingness to commit big investment also reflected in the number of mega projects announced during 2008. As against the 71 mega projects worth Rs.2,78,548 crore announced in the first half of the year, private sector announced only 36 mega projects worth Rs.1,19,358 crore, during the second half of 2008.

On the positive side, the private sector extended its dominance to other major sectors like Mining and Electricity. Till 2007, in terms of fresh investment, private sector dominance was seen only in the Manufacturing sector. While in the Manufacturing sector, it accounted for 94 per cent of the fresh investment, in Mining and Electricity sector it increased its shares to 97.2 per cent (64 per cent in 2007) and 69.7 per cent (56.8 per cent), respectively, in the calendar year 2008.

Fresh investment commitments from Public sector units were seen on large scale in the Electricity (Thermal & Hydro), Roadways, Railways, Water Supply Scheme and Irrigation sectors.

Geographical distribution

The top five states - Andhra Pradesh, Maharashtra, West Bengal, Madhya Pradesh and Jharkhand, together cornered around half of the fresh investment announced in 2008. Of the 11,904 new projects worth Rs.8,34,963 crore announced, the top five states together attracted 5,313 projects worth Rs.4,29,140 crore.

Helped largely by 25 mega projects worth Rs.65,000 crore spread across sectors like Cement, Steel, Machinery, Electricity, Commercial complexes, SEZs and Roadways, Andhra Pradesh was the most favoured destination for the fresh investment proposals in 2008. A year ago, the state ranked third among the top investment destinations in India.

Maharashtra (2,844 projects worth Rs.87,796 crore) and West Bengal (416 projects Rs.85798.82 crore) followed Andhra Pradesh and shared the second and third rank respectively. While Electricity, Automobiles, Petroleum products, Roadways and Irrigation sectors attracted the highest investment in Maharashtra, Metallurgy, Petroleum products and Railways projects accounted for bulk of the investment in West Bengal.

Madhya Pradesh and Jharkhand were the other two states which attracted sizeable investment during 2008.