No achhe din for investment

Mumbai: New investment in the country has declined by 32 per cent, spread across both the government and private sectors, said Madan Sabnavis, the chief economist, Care Ratings.

According to an analysis by the department of industrial policy and promotion and the Centre for Monitoring Indian Economy (CMIE), the new investments for the first nine months of FY16 totalled Rs 5.43 lakh crore compared to Rs 7.98 crore in the corresponding period in FY15.

In the current fiscal, the private sector has invested more at Rs 3.53 lakh crore compared to the government’s Rs 1.91 lakh crore.

However, on the positive side, there was a decline in the value of projects that have been dropped (stalled, abandoned or shelved) as per CMIE from Rs 4.02 lakh crore in 9M-FY15 to Rs 1.94 lakh crore in 9M-FY16. “It may be expected that conditions would improve in the investment climate soon,” observed  Mr Sabnavis.

Electrical equipment, followed by food processing, chemicals, metallurgical, and textiles were the five leading industries with higher investment intentions.

According to Mr Sabnais, engineering, metals, and textiles have also witnessed positive growth in terms of credit from banks during this period.

The government has  through its various schemes like Make in India, 100 Smart cities, Start-up India, etc., and facilitating the ease of doing business is hoping to spur investment and is also working towards channelling finance through the system for these projects to takeoff.