 "Private firms' investments on slow lane")
Private companies announced 2,856 new projects worth Rs 11.33 lakh crore between 2013-14 and 2015-16, but only a third of these are in the works.
In contrast, almost 60 per cent of the Rs 7.4 lakh crore new investments announced over the last two years by public sector undertakings is on the ground as the Narendra Modi government tries to revive economic growth.
On Tuesday, NTPC announced plans to raise Rs 15,000 crore to set up new capacity. ONGC last week said it had raised $1 billion to fund acquisitions abroad.
The National Highways Authority of India plans to raise Rs 50,000 crore to speed up road laying from 16 km a day to 41 km by March 2017.
Data collated by the Centre for Monitoring Indian Economy show private corporate investment fell to 47.7 per cent in 2015-16 from 60.2 per cent in 2010-11. PSUs increased their share to 52.3 per cent in 2015-16.
“It will take time for companies to start investing because there is excess capacity,” HCC Chairman Ajit Gulabchand said.
Average capacity utilisation in the manufacturing sector in 2015-16 was a low 72 per cent.
In contrast, almost 60 per cent of the Rs 7.4 lakh crore new investments announced over the last two years by public sector undertakings is on the ground as the Narendra Modi government tries to revive economic growth.
On Tuesday, NTPC announced plans to raise Rs 15,000 crore to set up new capacity. ONGC last week said it had raised $1 billion to fund acquisitions abroad.
The National Highways Authority of India plans to raise Rs 50,000 crore to speed up road laying from 16 km a day to 41 km by March 2017.
Data collated by the Centre for Monitoring Indian Economy show private corporate investment fell to 47.7 per cent in 2015-16 from 60.2 per cent in 2010-11. PSUs increased their share to 52.3 per cent in 2015-16.
“It will take time for companies to start investing because there is excess capacity,” HCC Chairman Ajit Gulabchand said.
Average capacity utilisation in the manufacturing sector in 2015-16 was a low 72 per cent.
CMIE reckons the steel and commercial vehicle industries used only 52 per cent and 37.5 per cent of their capacity, respectively.
Besides, large companies like Reliance Industries are reaching the end of their investment cycle and cash-rich companies are buying assets from indebted ones.
Early this month, UltraTech Cement agreed to buy the Jaypee group’s 17.2 million tonne cement capacity for Rs 16,200 crore.
“The priority for any corporate is to reduce debt,” said an Essar group executive. The group has agreed to sell its Jamnagar refinery to Russian oil major Rosneft.
Banks are also dragging their feet on loans over fears of prosecution by government agencies at a later date.
“The fear is hitting investments,” said the promoter of a conglomerate.
CMIE says the project pipeline of private companies was Rs 36,000 crore a year between 2011-12 and 2015-16 against Rs 5 lakh crore a year before 2008.
Adjusted for inflation, projects under implementation have declined, it adds.
