Investment proposals to set up new capacities declined over 70 per cent year-on-year (y-o-y) in the quarter ended December 2015. According to Centre for Monitoring Indian Economy or CMIE's database, around 383 new projects with investments worth Rs 1,04,854.5 crore were announced in Q3FY16 compared to 534 in the previous quarter. The steep decline could be partially attributed to the base effect since the corresponding quarter in the previous fiscal attracted huge investments. Aggregated new investment announcements in the December 2014 quarter stood at Rs 4,05,675.4 crore, the highest in the past 17 quarters.
In the December 2015 quarter, 95 projects around Rs 55,100 crore were announced in the manufacturing sector. This was lower by 11 per cent as compared to average quarterly new investments of Rs 62,300 crore announced in the sector in fiscal 2014/15.
Large projects in the third quarter of FY16 were announced in chemical, textile, consumer electronics and food sectors. Power sector attracted investments worth Rs 23,000 crore in 31 projects. Out of these, 10 were solar power projects with investments worth Rs 15,100 crore. Transport services segment witnessed announcement of 33 new projects with estimated investments of around Rs 11,800 crore. New projects announced in the real estate segment dropped significantly. Only 39 projects were announced in Q3FY16 as compared to 99 projects announced in December 2014 quarter.
Commissioning of projects during the December quarter dropped 49 per cent on a y-o-y basis. 246 projects with investments worth Rs 45,000 crore were commissioned. This was the lowest since December 2008. However, the aggregates for commissioning of projects are expected to go up, as information on project commissioning comes in with a lag.
Stalling of projects dropped sharply around 86 per cent y-o-y to around Rs 16,500 crore. Around 60 projects were shelved. The average quarterly stalling of projects between fiscal 2011/12 and 2014/15 hovered around Rs 1,30,000 crore.