Capital investment level seen in FY2014 (Rs 2513 billion) seems to be attainable in FY2015
The Reserve Bank of Indian has released the report on "Corporate Investment: Growth in 2013-14 and Prospects for 2014-15". The key highlights of the report are as follows:* Capex intentions of the companies indicate further weakening of the business sentiment in FY2014 compared with FY2013.
* Investment plans made were Rs 2148 billion (1065 projects) in FY2014 against Rs 2566 billion (958 projects) in FY2013.
* Investment in FY2014 was mainly envisaged in 'power', 'metal & metal products', 'textiles', 'cement' and 'construction' industries.
* Capital investment likely to be incurred in 2013-14 dipped 18% to Rs 2,513 billion.
Outlook
* Capital investment seen in FY2014 (Rs 2513 billion) seems to be attainable in FY2015 with the steps being taken to bolster investor confidence.
* Lead indicators point to continuing sluggishness in domestic economic activity in Q1FY2015.
* Deficient monsoon could affect agricultural production.
* Decline of the consumption and investment demand could be arrested in the forthcoming years due to a decisive election mandate bolstering investor confidence and raising expectations of revival of economy.
* Considerable improvement in the Business Confidence Index.
* Recent measures to incentivize long-term financing for infrastructure projects.
* Fast paced decision-making, economic reforms, improvement in business climate and fast tracking the projects already in pipeline, could revive sentiments, re-kindle investments and put the economy firmly on the path of recovery.
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