India Inc hit by slowdown; shelves $44 bn projects in '08

Jan 18 (PTI) The global economic downturn has impacted India Inc's investment with promoters shelving 420 projects worth more than Rs 2,09,000 crore (about USD 44 billion) in 2008, primarily in the last quarter, a survey says.

According to a survey by ProjectsToday, a firm tracking the country's project investments, of the 420 projects deferred last year, as many as 183 projects worth Rs 1,57,926 crore were shelved in the December quarter of 2008."The global financial meltdown, which hit Indian shores in the second half and impacted the economy, more particularly in the last quarter of the year 2008, forced promoters to shelve around 420 projects entailing a total investment of Rs 2,09,653 crore (approx USD 44 billion)," the ProjectsToday survey stated.

The global economic slowdown and fund crunch, which hurt the economy most after September, were two main reasons behind the promoters not going ahead with their capacity build-up plans, the survey said.

Though the shelved projects account for 5.43 per cent of the country's outstanding investment figure of Rs 38,60,769 crore (about USD 820 billion) as of December 2008, compared to last year the figure looks alarming, the survey said.

During 2007, 275 projects worth Rs 23,600 crore were shelved by promoters, it added.

"Increase in shelved projects shows (the) impact of (the) global downturn on the investment projects, which will lead to further delay in (the) country's infrastructure development," an infrastructure expert said.

PTI - Date 18 January 2009