Skip to main content

India's investment proposals to be lowest since 2004-05 in fiscal 2017-18; just 60% of those in 2016-17, predicts CMIE

Click on the photograph for an enlarged view
By Rajiv Shah
The Centre for Monitoring Indian Economy (CMIE), the country's top independent consultant, has said that the fiscal 2017-18 "is likely to go down as the worst possible year for investments in India", predicting, "New investment proposals are likely to stabilise around Rs 8 trillion in 2017-18, which would be about 60 per cent of the new proposals made during 2016-17 and would be the lowest level since 2004-05."
Coming against the backdrop of the Government of India basking in the glory over "rise" in Gross Domestic Product (GDP) in the last quarter from 5.7% to 6.3%, the CMIE's fresh analysis, based on the data it has collected, says, "This would be the third consecutive year of a fall in new investments since they spiked momentarily in 2014-15. The difference is that the fall in 2017-18 would be sharper than in earlier years."
The CMIE further says, "Revival of projects that were shelved or abandoned earlier would likely add up to about Rs 1.2 trillion in 2017-18. This would be half of the revivals in 2016-17. Nevertheless, they assume greater importance now than ever before in the light of the fall in new investment proposals."
The CMIE continues, "Revived projects would account for nearly 15 per cent of new proposals in 2017-18. In 2016-17, they were 18 per cent of the value of all new projects. Till 2012-13, they were less than 10 per cent of new proposals". It adds, "Total investments made during the entire implementation of projects that would be completed during 2017-18 are likely to add up to a Rs 4 trillion. This is much smaller compared to Rs 6.3 trillion in 2016-17 and Rs 5.8 trillion in 2015-16."
Pointing out that the sum of Rs 4 trillion is "very small compared to the Rs 11 trillion worth of completions that were initially supposed to be commissioned during the year", the CMIE reveal, "Companies kept delaying their completion dates, and as a result, the estimates of completions during 2017-18 came down progressively during the year to Rs 9 trillion and then to Rs 7 trillion."
Mahesh Vyas
The analysis, by Mahesh Vyas is Managing Director and CEO of the CMIE, says, "The value of projects that get stalled, abandoned or shelved increased during 2017-18. In the first three quarters these added up to Rs 3.9 trillion which is the same as it was in the entire fiscal 2016-17." It adds, they are "slated to increase" to about Rs 6 trillion in fiscal 2017-18.
Noting that "another Rs 5.9 trillion worth of projects were dropped because of lack of any information on them for a very long time", the CMIE says, "Thus, the total attrition during the first three quarters was investments worth Rs 9.9 trillion", which could "cross Rs 14 trillion" in fiscal 2017-18.
In fact, according to the CMIE, "The ratio of projects attrition to accretion, i.e the ratio of projects stalled or dropped to the addition of projects because of new announcements or revival of old ones, is expected to rise sharply during 2017-18", adding, "Attrition would exceed accretions by over 50%... In the past, attrition of investments has never exceeded accretions."
Admitting that the "CMIE is somewhat conservative in announcing that a project is stalled", the analysis says, "Compared to the investments stalled, a much larger value of outstanding investments sits under the header 'Projects with no information, but live'. These amounted to Rs 15.8 trillion as of the end of December 2017 compared to accretions that amounted to Rs 9.9 trillion during the first three quarters ended December 2017."
Even as saying that "the pipeline of investments may quite big at Rs 182 trillion", thr CMIE does not fail to point out that "this pipeline hasn’t grown. It has, in fact, shrunk from its peak of Rs 185 trillion as of March 2017. Half of these outstanding projects have moved beyond the stage of mere announcements..."

Comments

TRENDING

New Odia CM's tribal heritage 'sets him apart' from Hindutva Brahminical norms

By Bhabani Shankar Nayak*  Mohan Charan Majhi took the oath as the new Chief Minister of Odisha following the electoral defeat of the BJD led by Naveen Patnaik, who served as Chief Minister for twenty-four years. The new Chief Minister is the son of a security guard and a four-time MLA who hails from the remote village of Raikala in the Keonjhar district. He belongs to the Santali tribe and comes from a working-class family. Such achievements and political mobilities are possible only in a democratic society. Majhi’s leadership even in the form of symbolic representation in a democracy deserves celebration.

AMR: A gathering storm that threatens a century of progress in medicine

By Bobby Ramakant*  A strategic roundtable on “Charting a new path forward for global action against Antimicrobial Resistance (AMR)” was organised at the 77th World Health Assembly or WHA (WHA is the apex decision-making body of the World Health Organization – WHO, which is attended by all countries that are part of the WHO – a United Nations health agency). AMR is among the top-10 global health threats “Antimicrobial Resistance (AMR) is a growing and urgent crisis which is already a leading cause of untimely deaths globally. More than 2 people die of AMR every single minute,” said Dr Tedros Adhanom Ghebreyesus, Director General of the WHO. “AMR threatens to unwind centuries of progress in human health, animal health, and other sectors.”

What stops Kavach? Why no time to focus on common trains meant for common people?

By Atanu Roy  A goods train rammed into Kanchenjunga Express on 17th June morning in North Bengal. This could have been averted if the time tested anti-collision system (Kavach) was in place. 

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Top Punjab Maoist who failed to analyse caste question, promoted economism

By Harsh Thakor*  On June 15th we commemorated the 15th death anniversary of Harbhajan Singh Sohi or HBS, a well known Communist leader in Punjab. He expired of a heart attack in Bathinda in 2009.

Saving farmers and consumers from GM crops and food: Philippines court shows the way

By Bharat Dogra*  At a time when there is increasing concern that powerful GM crop lobbyists backed by enormous resources of giant multinational companies may be able to bulldoze food safety and environmental concerns while pushing GM crops, a new hope has appeared in the form of a court decision from the Philippines.