Investments up by 14.4 per cent: CMIE

The overall investment scenario showed strong signs of revival in the quarter ended July 2004, after last year’s flaccid realisations i...

The overall investment scenario showed strong signs of revival in the quarter ended July 2004, after last year’s flaccid realisations in several key sectors.

Total outstanding investments were favourably impacted by a bounce back in financing for petroleum products and electricity generation, which had straggled performance a year ago, while manufacturing and services continued on their upswing.

The 38th survey of investment projects by the Centre for Monitoring Indian Economy (CMIE) has fixed the total outstanding investment in 9,581 projects in various stages of implementation at Rs 16,32,917 crore as on July 2004.

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This is a rise of 14.4 per cent over last July, when investments had grown 4 per cent, without accounting for several power projects that were fixed for a review in 2003.

In the quarter ended July 2004, the turnaround in the electricity generation sector was led by a large number of new projects being announced and revived, including two in Orissa—the Rs 18,000 crore Hirma project and Neyveli Lignite Corporation’s Rs 8,000 lb Valley power project.

Total investments in electricity generation grew 12 per cent, with 798 projects envisaging an investment of Rs 4,67,195 crore as compared to 697 projects with Rs 4,16,512 crore recorded a year ago.

Investments in electricity distribution grew 22 per cent with an aggregate inflow of Rs 16,649 crore as against Rs 13,654 crore recorded a year ago. The power sector continued to be the largest holder of outstanding investments, a position it held even last year despite a 15 per cent drop brought about by a slowdown in implementation.

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Petroleum products, which showed a downslope in 2003 July also bounced back with an incremental growth of 42 per cent. The outstanding investment was Rs 90,961 crore as against Rs 64,172 crore a year ago. 22 projects envisaging an investment of Rs 32,629 crore were announced while three projects worth Rs 10,460 crore were revived over the year ended July 2004.

Outstanding investments have has clocked an impressive growth of 32 per cent, with a steep increment of Rs 3,46,092 crore as compared to Rs 2,62,515 crore a year ago. Within manufacturing, the growth is largely from ferrous metals, paper and paper products, synthetic textiles, fertiliser, rubber and rubber products.

However, investments in tyre and tubes, cement, automobiles, electrical machinery and cotton textiles were disappointing. The services sector grew a healthy 9.9 per cent with overall investments of Rs 6,06,161 crore as of July 2004. Heavy contribution to services growth came from fresh investments in Direct To Home (DTH) platforms and expansion of cellular telephony networks where investments had dropped to Rs 85,477 crore last year, from Rs 1,04,351 crore in July 2002.