The domestic investment announcements of India Inc. registered a growth of 16 per cent during the calendar year 2009 over 2008 with Gujarat garnering a lion's share followed by Orissa and Andhra Pradesh in domestic investment plans during the period of January-December 2009.
Gujarat witnessed Rs. 2,45,352 crore worth of investment plans. Helped by the investor friendly policies of the state government which led to a smooth relocation of the Tata Nano project, the state attracted majority of investment plans in the real estate, power and infrastructure sectors.
Orissa and Andhra Pradesh followed Gujarat in attracting investments, according to an analysis of ASSOCHAM Investment Meter (AIM) study on corporate investments.
As per the annual AIM assessment report for corporate investments across states and sectors, total investment plans of India Inc. increased significantly from Rs 13,80,099 crore in 2008 to Rs 15,94,203 crore in 2009; out of which Gujarat, Orissa and Andhra Pradesh carved out a majority share of 15.4 per cent, 12.6 per cent and 8.1 per cent respectively.
Orissa stood at second position after Gujarat and recorded investment proposals worth Rs. 2,00,846 crore during the last year. The availability of rich mineral resources such as coal and iron ore along with cheap availability of manpower attracted massive investments in Orissa. Steel and power were among the sectors which attracted maximum investments in the state.
Successful commencement of gas production from the D6 block of KG basin helped Andhra Pradesh to rank amongst the top three states in attracting corporate investors in 2009. The state recorded investment plans to the tune of Rs. 1,29,157 crore. Energy and the real estate were among the major sectors that attracted maximum investments.
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Karnataka and Maharashtra stood at fourth and fifth position by attracting investment plans worth Rs. 1,06,092 crore and Rs. 91,824 crore respectively during 2009. Karnataka has cashed in its investor friendly image by attracting a proposal of setting up a six-million-tonne integrated steel plant by Arcelor Mittal whereas benefitted by its financial infrastructure; Maharashtra has also been among the leading investment destinations in the country.
In terms of sectoral analysis, the ASSOCHAM study shows that the power sector was the major investment attracting sector for 2009. The sector attracted investment plans worth Rs. 4,14,327 crore with a share of 26 per cent in the overall investment plans across the country.
Following the power sector, real estate and energy sector were amongst the top investment attracting sectors during the year. Real estate sector witnessed proposed investment plans worth Rs. 2,57,314 crore whereas energy sector attracted proposed investments to the tune of Rs. 1,98,565 crore.
Other sectors which recorded high flowing corporate investments during the last year were metals & mining (Rs. 1,59,534 crore), infrastructure (Rs. 74,210 crore), hospitality (Rs. 43,746 crore), auto/auto components (Rs. 38,150 crore) and telecom (Rs. 34,461 crore).
"The robustness in corporate investment activity on the Indian soil shows how competently the economy has managed to weather the storm of unprecedented global financial crisis," said DS Rawat, secretary general, ASSOCHAM.
However, he adds that the implementation of these investment projects have not been devoid of hurdles. These include, land acquisition problems, bureaucratic inertia, ongoing economic slowdown and depressed expat market conditions. The government needs to address these issues on priority basis in order to realise the fruits of these investments.