Announcements of new investment projects rose by 37.8 per cent year-on-year in the December quarter of financial year 2019-20 after declining for the last three quarters in a row.
The March quarter saw a fall of 42 per cent, while June and September quarters reported a decline of 73.8 per cent and 40.2 per cent, respectively. According to CMIE, 360 new investment projects worth Rs 4.3 lakh crore were announced in the December quarter, the highest since June 2018.
This takes the total new investments during the first three quarters to Rs 6.8 lakh crore. The figure is likely to get revised upwards in the coming weeks.
Investments proposals have never dropped below Rs 10 lakh crore over the past 15 years. According to CMIE, if the last quarter of the year records around Rs 2.7 lakh crore of new investment proposals, which is the average quarterly new investments, then along with revisions of estimates of the past three quarters, the year could end up with new investments worth at least a little over Rs 10 lakh crore. However, this would be the lowest in any year since 2013-14.
A sudden spurt was visible on the commissioning front. Projects worth Rs 1.36 lakh crore were completed during this quarter. This compares well with new capacities worth Rs 79,050 crore and Rs 80,526 crore completed during September and June quarters, respectively. Although, this did not prevent it from falling by 0.8 per cent for the third consecutive quarter. The December quarter in 2018/19 had witnessed completion of 686 projects with investments worth Rs 1.37 lakh. The aggregate commissioning of projects will witness upward revision due to information coming in with a lag. Cumulative completions till the end of the third quarter of this fiscal add up to Rs 2.95 lakh crore.
Although one can see signs of improvement, it may be too early to announce a revival in investments.