India sees 37% rise in project investment in FY'09

India witnessed 37 per cent growth in project investment in 2008-09 and going forward, the pace of these fund infusions will remain moderate in this financial year as well, a survey says.

According to the survey of project investment in India by ProjectsToday, as of March 31, 2009, there were 29,628 projects worth Rs 42,35,484 crore, a rise of 37.4 per cent in terms of investment and 29 per cent increase in terms of number of projects over the year-ago period.

As of March 2008, the country had 22,883 projects worth Rs 30,83,264 crore.

Going forward ProjectsToday expects the public sector to continue its project investment activities during 2009-10 in the critical infrastructure sectors like roadways, water supply, electricity, irrigation and community services, the same cannot be vouched for the private sector, which appears to be waiting for some more concrete signs of revival.

"Given this situation, the pace of project investment will remain moderate at least in the first half of 2009-10," ProjectsToday said.

A sectoral analysis shows that the services and utilities sector cornered the largest investment in the just ended fiscal, with a share of 36.1 per cent in total investment, followed by the manufacturing sector at 33.6 per cent and the electricity sector at 31.5 per cent.

A geographical analysis shows that in the last five years, the number of states with aggregate project investment of Rs 1,00,000 crore or more went up from seven to thirteen.

The shares that attracted the maximum investments include -- Maharashtra, Andhra Pradesh, Orissa, Gujarat and Tamil Nadu, the survey said.

According to the survey during 2008-09, 12,583 new projects entaining a total fresh investment of Rs 8,62,634 crore were announced.

Compared to 7,112 new projects worth Rs 5,78,912 crore announced in the first half of FY'09, only 5,421 new projects worth Rs 2,83,722 crore were announced in the second half.

Though at a macro level the project investment activities in India in the just indicated fiscal continues to indicate a buoyant picture, a closer look at the monthly trends in fresh investment indicated that bulk of the growth came in the first half of the fiscal 2008-09 and the second half saw drastic slow down in investment activities, the report said.

"The first half saw unprecedented boom in announcement of new projects by both private and public sector enterprises. In the second half, while the public sector continued its announcement binge, the private sector played a subdued role," ProjectsToday said.

A sectoral analysis of fresh investment intentions indicate that the manufacturing sector bore the brunt of the global meltdown, followed by the electricity sector, and the services & utilities segment.

Published in ZEE News dated 11 April 2009