Industrial and infrastructure projects worth Rs5.18 trillion were completed in India in 2016-17, the second highest in a decade, the Centre for Monitoring Indian Economy (CMIE) said. The top 10 projects accounted for 44% of the amount, indicating the concentration of projects in the hands of a few.
In each of the last four years, the top 10 projects have contributed 24% to 32% of completed projects by value, according to Mint research.
However in terms of numbers, the project completion for the year was the second lowest in a decade. During the year, 1,395 projects were completed, far below the decadal average of 1,568 projects.
Four hundred and eighty-four projects in CMIE’s capital expenditure database were scheduled to be completed in 2016-17. If at least a third of them had got completed, the total commissioning for 2016-17 would surpass the record high of the previous year, a CMIE statement said.
During the year, Rs2.89 trillion worth of private sector projects were completed, as against Rs2.29 trillion of government projects. Government project completions fell by 34% in 2016-17 from a year earlier, while private sector completion rose by 10%.
Reliance Jio Infocomm Ltd accounted for a fifth of completed projects. This was the largest project ever completed in India. The year 2016-17 also saw the country’s second largest project—Indian Oil Corp. Ltd’s Rs34,600 crore Paradip refinery—getting completed in February.
Nine other big projects were also completed during the year, which entailed an investment of Rs1.29 trillion. The majority of these projects were announced seven to 10 years ago and have been completed after missing deadlines several times, the statement noted.
The numbers for 2016-17 may get revised upwards, since not all promoters are prompt in announcing the commissioning of their projects, CMIE said. Also, information about the completion of a few projects becomes available after a while through annual reports, investor presentations, earnings conference calls or interviews of company officials with the media.
Sectoral composition of projects completed reveals that direct and high employment-generating sectors like manufacturing and mining have seen a sharp drop in 2016-17. The share of the manufacturing sector has declined from 28% in 2015-16 to 18% in 2016-17, while that of mining has more than halved to 2.4% in 2016-17 from 6% a year earlier. Electricity, services and mining contributed 29%, 42% and 2%, respectively.
“While completion of long-due large projects is a positive sign for the economy, this is unlikely to have a very significant second-rung impact on employment and aggregate demand,” CMIE noted.