look news india
Mumbai: The volume of new project announcements, which stood at a high of 64 per cent year-on-year in the September quarter of 2024, was seen at a low of 22.10 per cent in the December quarter. According to Center for Monitoring Indian Economy (CMIE) data, projects worth Rs 6 lakh crore were launched in the December quarter, much lower than the Rs 7.70 lakh crore worth of projects announced in December, 2023. The number of projects announced in the September 2024 quarter was Rs 7.20 lakh crore.
Weak consumer demand and lack of improvement in demand in urban areas of the country are being considered as the reason for indifference in new investment from the private sector. However, due to elections in some states, the volume of project announcements has slowed down.
Project announcements from the government and public sector companies have slowed down, dampening expectations of an increase in capital expenditure.
Investments were expected to remain high as many companies are investing in the renewable energy and capital goods sectors.
The value of projects completed by the government and private sector was also lower by 57.10 per cent and 40 per cent respectively. The number of projects completed in the third quarter of the current financial year is also 52.60 percent less.
In the period from April to November 2024, the capital expenditure of the Center has declined by 12.30 percent annually to Rs 5.13 lakh crore. There is a need for a rapid increase in expenditure to meet the target of Rs 11.11 lakh crore set in the budget for the current financial year.
The Finance Ministry’s monthly review report on the economic situation said that the growth of capital formation is accelerating in the beginning of the last six months of FY 2025. The capital expenditure of the central government is increasing. However, an analyst expects the announcement of projects and execution of sub-contracts to pick up in the March quarter.
