Investments see modest recovery in first 5 months
The investment has increased by nearly 22 per cent at Rs 1.5 lakh crore
By : DC Correspondent
Update: 2015-07-02 06:02 GMT
Mumbai: The investment scenario in the country has picked up under the Narendra Modi government, if the data relating to the first five months was to be believed. However, the investments have not bounced back to the 2011-levels.
According to a study done by Care ratings, the amount of investments over the last five years plummeted from Rs 15.4 lakh crore in 2011 to Rs 4.05 lakh crore in 2014. The number of investment proposals also dropped to 1,843 in 2014 as against 4,336 in 2011.
Investment figures of the first five months of this year, however, could give some comfort to policy makers. The investment has increased by nearly 22 per cent at Rs 1.5 lakh crore in January-May period in 2015 compared to Rs 1.23 lakh crore in the same period in 2014. Notwithstanding the increase in investments, the number of proposals during this period has come down to 826 as against 868 in the corresponding period in 2014.
“Investment proposals made across industries paint a promising picture. However, the investments implemented over the period were considerably lower in comparison and concentrated to the major industries such as metallurgical, electrical equipment, textile and chemicals,” said Care’s chief eco-nomist Madan Sabnavis.
The situation hasn’t change much after May as the latest manufacturing PMI by HSBC Research, fell to 51.3 in June (vs 52.6 in May), as output and new order flows weakened, including from exports. Consequently, companies slowed their quantity purchases and cut back on the pace of inventory accumulation. The report further said that all eyes are on government capital spending this year to revive investment, as corporates are over-leveraged and banks are weak.