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Project investments up 9% -- Centre takes the lead while foreign cos shy away

Ambarish Mukherjee

NEW DELHI, April 22

EVEN as total investments in all projects in India went up by 8.9 per cent in 2001-02 with the Union Government taking the lead, foreign investors shied away, recording negative growth.

According to the survey on project investments in India, conducted by Projects Today, a division of Economic Research India Ltd (ERIL), on a year-on-year basis, outstanding project investments increased by nine per cent in the last fiscal while the implementation ratio grew marginally from 37.1 per cent to 37.3 per cent, allaying fears of a slowdown in the pace of project implementation.

However, outstanding foreign investment in the country dipped by three per cent during the year mainly due to gradual withdrawal of foreign companies from power and other infrastructure projects.

Hence, the implementation ratio went down from 28.9 per cent in March 2001 to 23.3 per cent in March 2002, indicating unwillingness of the promoters to implement the projects.

As on March 31, 2002, there were 6,894 live projects in India involving an investment worth Rs 17,10,130 crore, up 8.9 per cent compared to 6,048 live projects involving Rs 15,69,996 crore on March 31, 2001.

During the year, fresh investments of Rs 2,22,000 crore were announced, mostly in the infrastructure and services sectors. Simultaneously, projects worth Rs 77,682 crore were shelved by the promoters during the year, of which, nearly two-thirds were in the power sector. According to the survey, the decision of the domestic financial institutions to withhold loans sanctioned to some of the large power and steel projects left their promoters with no other option but to put the projects on the backburner.

In 2001-02, 328 projects worth Rs 36,773 crore were completed with 64 projects worth Rs 14,241 crore being in the steel, cement and roadways sectors.

The survey further found that the share of Government in total investment increased by eight percentage points from 50.8 per cent in March 2001 to 58.9 per cent in March 2002.

During the year, outstanding projects investment in the Government sector increased by 26 per cent along with a marginal increase in the implementation ratio.

One third of the total investments planned in the public sector was in power generation and transmission sectors while another 30 per cent was concentrated in irrigation, roadways and railway projects. Among the Government agencies, project investment activities by the Central Government owned-units were noteworthy.

During the last 12 months, not only did the proposed investment by the Government-owned units increase by 29 per cent but their pace of conversion of proposals into actual implementation also quickened.

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