Five states have cornered 61.6 per cent of the total investments of Rs 1,34,000 crore in bank-assisted projects during 2013-14, indicating the highly skewed nature of new project distribution in the country.
While five states — Maharashtra, Gujarat, Orissa, Chhattisgarh and Karnataka — received new project investments of Rs 82,544 crore during the year, three other big states — Uttar Pradesh, West Bengal and Bihar — together got a measly Rs 3,216 crore in new projects, reveals the figures from a study by the Reserve Bank of India.
While power projects have attracted the maximum investments of Rs 44,756 crore, or 33.4 per cent of the total investments, the metal industry got Rs 21,574 crore worth of projects. Investments of around Rs 1,50,000 crore in the power sector are already under a cloud following the Supreme Court order on coal mines “illegally” allocated since 1993.
Maharashtra got investments of Rs 25,862 crore in 78 projects during the fiscal, thus topping the table for attracting maximum investments, as per the RBI study.
The study is based on data submitted by banks and financial institutions (FIs) which reported sanctioning of financial assistance for 481 projects with an aggregate project cost of Rs 1,34,000 crore, each with project cost of Rs 10 crore and above. Gujarat came second with investments of Rs 20,234 crore in 68 projects, Orissa in the third spot with investments of Rs 14,874 crore in 10 projects and Chhattisgarh in the fourth position with investments of Rs 13,668 crore in 16 projects.
On the other hand, Uttar Pradesh, the largest populated state, got just 1.1 per cent of the investment, or Rs 1,474 crore. West Bengal also got a similar amount. Bihar received investment worth only Rs 268 crore.
“Major textile projects along with ceramics and chemicals were taken up in Gujarat while, for industries like power, agricultural and food products, sugar and construction, Maharashtra became the favourite destination. Orissa bagged the maximum share in metal industries. Entertainment, electric equipment & electronics and hotel industry projects were well spread across a number of states resulting in an increase in the share of multiple-states based projects,” the study says.
In the previous year (2012-13), Orissa was in the top position (26.8 per cent of the total investments) followed by Punjab (10.9 per cent). RBI figures show that Gujarat led in attracting investments for three years from 2006-07 to 2008-09, but investments in the state started declining from 2000.
The outlay of projects, which were sanctioned institutional assistance by banks and FIs during 2013-14, shows a decline of 31.73 per cent from fiscal 2012-13, when 425 projects with aggregate cost of Rs 1,96,300 crore were sanctioned.
In addition, the RBI study also covered proposed investment of 563 companies contracting ECBs/ FCCBs in 2013-14 aggregating Rs 80,300 crore and proposed investment of Rs 500 crore intended by 21 companies by issue of domestic equity during 2013-14.