Wednesday, Oct 01, 2014

As project completions lag, TN, six others buck trend

It was only in FY13, that the power sector saw a spurt to record a share of nearly 34 per cent in total investments completed in the state. It was only in FY13, that the power sector saw a spurt to record a share of nearly 34 per cent in total investments completed in the state.
Written by Anil Sasi | New Delhi | Posted: May 12, 2014 2:50 am | Updated: May 12, 2014 2:53 am

In FY14, a year when the investment projects attaining completion across the country clocked a sharp dip of 37 per cent at Rs 2.32 lakh crore, seven states led by Tamil Nadu bucked the broader trend of a dip in overall investment completions.

Tamil Nadu recorded the completion of investments worth Rs 26,430 crore during the year, displacing Gujarat from the top slot, according to CMIE’s CapEx rankings.

The only time Tamil Nadu had managed to secure the top position with respect to completion of investment projects was way back in FY03, with the ranking having been consistently dominated by Gujarat and Maharashtra since then.

Completion of projects is the most meaningful indicator of investment sentiment, when the invested funds transform into productive assets on the ground, generate employment and lead to the commencement of the production of new goods or services.

In FY14, Maharashtra retained its second position for the third consecutive year in the CMIE’s latest CapEx database, with completion of investments worth Rs 24,240 crore. Karnataka came in third, surpassing Gujarat, with completion of Rs 21,500 crore worth of investments.

After leading the charts for three consecutive years, Gujarat was down to the fifth position in FY14, with projects totaling Rs 20,460 crore achieving investment completion.

During the year, in Tamil Nadu, the power sector had the highest share in the total investments completed, followed by the services sector.

Traditionally, Tamil Nadu has had the manufacturing sector, including automotive, dominate the investment completion lists.

Investments in Gujarat and Karnataka were mainly driven by the manufacturing sector, while those in Maharashtra primarily were largely pertaining to the services sector.

Tamil Nadu was also the leading state in terms of investments completed in the power sector. In the past decade, the share of power sector in investments across the state never exceeded 16 per cent.

It was only in FY13, that the power sector saw a spurt to record a share of nearly 34 per cent in total investments completed in the state. This share further rose to 42.5 per cent in FY14.

Tamil Nadu saw completion of 11 power projects worth Rs 11,230 crore in FY14. Over the past six years, there has been a consistent rise in investments in the power sector of Tamil Nadu, in line with a capacity addition of about 7,500 MW in the state since FY09. Of this, almost 3,500 MW was added in the last two years alone.

During FY14, Tamil Nadu added a capacity of nearly 1,631 MW, of which 1,097 MW was in the thermal sector. NTPC Tamil Nadu Energy Company Ltd completed the Rs 3,090 crore MW Vallur Phase II thermal power project in February 2014 entailing a capacity of 500 MW.

Tamil Nadu Generation continued…

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