There was a resurgence of new project announcements in the March quarter. According to data compiled by the Centre for Monitoring Indian Economy (CMIE), there were Rs 3.18 lakh crore worth of new projects announced in the March quarter compared to Rs 1.28 lakh crore announcements in the three months ended December.
Leading the way in the March quarter was Maharashtra with Rs 96,889 crore worth of new projects. An unnamed liquid crystal display manufacturing project and the Mahindra & Mahindra’s automotive expansion project in Nashik were some of the major new project announcements in the March quarter. Overall, Maharashtra accounted for 30% of new project announcements in the three months, ending on March, followed by Andhra Pradesh (20%).
As the chart shows, this is the highest quarterly new project announcement in Maharashtra in at least 10 quarters. Note, however, that these new project announcements do not always translate into implementation. Also, at the same time, there was an increase in the stalled projects — those whose implementation is stuck owing to various factors such as land acquisition problems, lack of environmental clearance etc —something which is true for the entire country. According to HSBC Securities and Capital Markets (India) Private Ltd, stock of stalled projects touched 8.4% of GDP by end of March.
“Continued rise of stalled projects does not provide much confidence for investment activity, despite the faint flickers of hope embedded in (the latest) data. Instead, consumption is likely to be the main driver of growth in the foreseeable future,”wrote Pranjul Bhandari and Prithviraj Srinivas, economists with HSBC.
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