In the new data released by Centre for Monitoring Indian Economy, the investment sentiment in the country reached a new low in the September quarter of 2017. According to CMIE, projects worth Rs 845 billion were proposed during the quarter ended September 2017, which is termed as the ‘lowest level of intentions to invest’ seen in a quarter during the tenure of the Modi government.
“The investment announcements made in the September 2017 quarter are lower than the investments proposed even during the June 2014 quarter when investments had come to a halt for all practical purposes in the face of political uncertainty”, says Mahesh Vyas, Managing Director and CEO, CMIE.
He further adds, “There was much angst then, against the new land acquisition law and corruption. Even during those uncertain days, new investment proposals added up to Rs 871 billion. Adjusted for inflation that would be worth nearly a trillion rupees today. In comparison, the Rs 845 billion worth of new investments in the quarter ended September 2017, is clearly a low level.”
As per the data compilation of CMIE, the last ten quarters have remained anaemic in terms of new investments, the exception of a brief resurgence during 2014-15.
“A few sudden increases seen during these ten quarters were quickly followed by declines. There was never really a revival of investments during the Modi government,” says Vyas.
New Investment Low
During the quarter ended September 2017, Rs 986 billion worth of projects were either newly proposed or were revived. In comparison, Rs 3,312 billion worth of projects were either completed, abandoned, shelved or dropped for other reasons. The fall in the flow of new investment proposals is concentrated in the private sector.