Fresh investments attracted by states rise 8% in value to Rs 3.35 trillion

Fresh investments attracted by states has grown eight per cent in value during April-December of this financial year as against the comparable period of FY18. The investments are premised on the Industrial Entrepreneurs Memorandum (IEMs) filed.

The proposed investments totaled to Rs 3.35 lakh crore at the end of December 2018 rising from Rs 3.15 lakh crore in the year-ago period. There was a marked increase in the number of IEMs, rising from 1443 to 1735, data sourced from the Department of Industrial Policy & Promotion (DIPP) showed.

Data on investment intentions based on IEMs filed shows a positive trend. “For the  period April  to  December  there was an increase in the number of IEMs filed as well as the proposed investment. While these refer to only intentions, it is  still positive from the point of view of reflecting potential investment”, a report by CARE Ratings stated.

For calendar year (CY) 2018, metals sector grabbed the highest share of proposed investments at 20.8 per cent followed by electrical equipment (12.5 per cent), chemicals (10.9 per cent), textiles (5.4 per cent) and food processing (5.1 per cent). Among states, Karnataka leads with 19.8 per cent share of the investments drawn with Maharashtra following closely at 18.8 per cent.

“IEMs implemented in CY 2018 were the highest at Rs 2.55 lakh crore in the last three years. They  were Rs one lakh crore in 2016 and Rs 0.71 lakh crore in 2017. Maharashtra dominated among the states  with a share of 51 per cent  while  electrical equipment, chemicals and metals accounted for a little over 25 per cent of total IEMs implemented”, the report noted.

“There are signs of investment intentions being positive albeit to a limited extent. Juxtaposing this with improved capacity utilization rates, it is possible to say that the future looks positive in the absence of any  shock  or  disruption. Higher quantum  of  projects  dropped  is  a  concern  as  it  makes  one  look  at investment intentions with a bit of caution”, it added.