Gujarat ranks fifth in investment completion for quarter ending Sept 2014, lowest in four years, says CMIE

By Our Representative
Latest analysis of the data collected by the Centre for Monitoring Economy (CMIE), India’s premier independent economic research body, has busted the myth that Gujarat is the "growth engine" of India, as claimed by Prime Minister Narendra Modi. Even as releasing facts suggesting that there has been a “steep decline in commissioning of projects” in India, lowest since December 2006, CMIE researcher Pradnya Deo has said, Gujarat is "in the fifth spot with investment completion at Rs 18.1 billion", which is “the lowest amount of investments completed in Gujarat in the past four years.” The researcher added, “Of these investments, Rs. 14.1 billion “belonged to the manufacturing sector.”
Deo said, while “completion of investment projects in India was substantially low in the September 2014 quarter at Rs 288 billion, showing a year-on-year decline of 54.8 per cent”, Karnataka saw “maximum investment completion in the September 2014 quarter at Rs. 81.3 billion, highest in the past six quarters.” The Rs 64 billion Mangalore Aromatic Complex Project was “mainly responsible for this”, he said, adding, the ONGC Mangalore Petrochemicals Ltd “completed this project on 16 September 2014. It has a capacity of producing 0.9 million tonnes per annum (mtpa) of paraxylene and 0.3 mtpa of benzene.”
Deo further said, “Maharashtra stood second for the second consecutive quarter with completion of investments worth Rs 57.7 billion. Over 50 per cent of these investments were in the manufacturing sector. Another Rs. 25.8 billion investment was completed in the services sector, of which Rs 17.3 billion belonged to the transport segment. Road infrastructure in Mumbai got a major boost with completion of the Rs. 17 billion Sion Panvel Expressway. The expressway covers a stretch of 23.09 kms and is expected to reduce travel time by 30 minutes.”
Then came Jharkhand, which “saw investments worth Rs 28.6 billion completed in the September 2014 quarter, as opposed to no investment completion in the September 2013 quarter. Completion of Tata Group’s Continuous Annealing & Processing Line Facility at Jamshedpur worth Rs. 27.5 billion was primarily responsible for this. The project has a capacity to produce 0.6 million tonnes per annum (mtpa) of high quality cold rolled sheets.”
On the fourth position stood Telangana, with “Rs 20.3 billion, in comparison to Rs. 6.2 billion in September 2013 quarter. The major project to see light was Procter & Gamble Home Products Ltd’s (P&G) Kothur Laundry, Personal and Babycare Products Project worth Rs. 9 billion, set up at Mahbubnagar. The amount of investments completed in Telangana was also higher than those in Andhra Pradesh, which saw completion of investments worth Rs. 14.2 billion in the quarter.”
In all, the researcher said, “Stalled investments in India stood at Rs. 1,390 billion in the September 2014 quarter, 16.8 per cent lower than the year ago level. Jharkhand saw maximum stalling of investments at Rs. 361 billion, primarily because of land acquisition problems.” The projects abandoned due to land acquisition issues include:

• Steel Authority of India Ltd’s (SAIL) Rs. 250 billion Sindri Integrated Greenfield Steel Plant Project with a 5.6 mtpa capacity.
• SAIL also abandoned its Rs. 50 billion Sindri Power Project with 1,000 mw capacity.
• SAIL’s Sindri Urea Project, which involved setting up a fertiliser plant having 1.15 million tonnes per annum (mtpa) capacity.

Meanwhile, another CMIE researcher, Suparna Chattopadhyay, analyzing the steep decline in commissioning of projects, said, “Projects worth Rs 318 billion were commissioned during the quarter ended September 2014, registering a sharp decline. The value of investment in these 211 projects completed was lowest in the past 32 quarters, i.e since December 2006. Estimates for project completion are expected to go up with information coming in with a lag, but chances are less that the value will go up significantly.”