New Delhi: The global economic downturn has impacted India Inc’s investment with promoters shelving 420 projects worth more than Rs2,09,000 crore (about $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 Rs1,57,926 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 Rs2,09,653 crore (approx $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% of the country’s outstanding investment figure of Rs38,60,769 crore (about $820 billion) as of December 2008, compared to last year the figure looks alarming, the survey said.
During 2007, 275 projects worth Rs23,600 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.
Interestingly, a record number of investment proposals were announced in the country during 2008; 11,904 new projects with a total investment of Rs8,34,963 crore were on the drawing-board and a majority of these start-ups were by private investors.
The projects investment survey, capturing India’s investment climate as of December 2008, was carried out for 27,609 projects with a total investment of Rs38,60,769 crore.
Meanwhile, aggregate investment increased by 34.2% during the year ended December 2008, a rise much higher than the 14.2% in 2007, with most of it in the first half of the year.
Outstanding investment by private sector companies grew by 50.2% during the calendar year 2008. This was much higher than the corresponding growth of 19.1% in central public sector companies and 30.2% in state government undertakings.
Further, the survey revealed that aggregate investment by foreign companies increased by 29.6% as against decline of 24.3% recorded in December 2007.
The share of the public sector in the total investment pie declined to 54.5% in December 2008 from 58.9% in December 2007, it added.
The survey includes investments projects announced in manufacturing, mining, electricity, services & utilities, and irrigation.