New Delhi: Investments announced in the infrastructure sector have plunged by 85% during October-December this fiscal, against the same period last year, due to the global liquidity crisis, a study said.
“Indian corporates have announced investments of Rs46,328 crore during October-December 2008-09 compared to Rs3,11,707 crore in the corresponding period previous year, registering a sharp dip by 85%,” industry body Assocham said in the study.
Liquidity crunch and global financial crisis has dampened fresh investment announcements by domestic business leaders in the sector, as about $500 billion is required for financing infrastructure projects during the 11th Plan period, it said.
The share of infrastructure sector in total investment plans during the three-month period (October-December) also reduced from 32.5% in FY 08 to 11.3% in FY 09.
“Most domestic private players are unable to take up new projects in infrastructure segment, as even the prior announced investments are having difficulties due to acute shortage of funds faced by the industry,” Assocham president Sajjan Jindal said.
The study further said the number of projects announced by the domestic companies in the sector also dipped by 71.8% to 18 during Q3 FY 09, from 64 in Q3 FY 08.
It also said the once investment-bullish sectors like power and steel have now dried up, failing to attract fresh announcements in the third quarter of the fiscal.
In the steel sector, capex plans dipped by a whooping 95.9% in the Q3 FY 09 to Rs4,950 crore from Rs1,22,950 crore same time in FY 08. Similarly, in the power sector, investment plans slipped by 92.3% to Rs3,520 crore in Q3 FY 09 as against Rs46,123 crore in the corresponding period of the previous fiscal.