New investments in India fell to their lowest level in 14 years in the October-December quarter, Mint reported on Thursday, citing data from the Centre for Monitoring Indian Economy. Companies in India announced new projects worth Rs 1 lakh crore during the quarter, 53% lower than the previous quarter.
The figure is 55% lower than the same quarter last year, and just a fifth of the Rs 5.1 lakh crore investment in January 2017-March 2017. The investment was nearly Rs 4 lakh crore in the first quarter of 2018.
Investments in private projects declined 62% since the previous quarter, while those in government projects fell 37%. The investments in government projects, worth Rs 50,604 crore, was the lowest since December 2004, the analysis by Mint showed.
All major sectors except construction experienced the decline in October-December. “The continuing overhang of bad debt, rising policy uncertainties ahead of the polls, and the lack of much progress in unclogging the pipeline of stalled projects seems to be weighing down the animal spirits of Indian industry,” the Mint analysis observed.
Mahesh Vyas, the managing director of the Centre for Monitoring Indian Economy, told CNBC-TV18 that the fall in new investments was not a “plunge” or a “sharp decline” but a part of a “steady decline that has been happening for the last three-and-a-half years”. The economy is seeing a decline in new projects as well as the revival of old projects, and the rate of stalling of projects remains high, he said.