India Inc sees 29% decline in Q1FY09 capex: ASSOCHAM

Following a strong growth in the third and the fourth quarter of 2007 in terms of investments announcements, the domestic expansion plans saw a moderate decline of 29 per cent in the first quarter of FY09, in response to the continuing financial instability and uncertainty in the Indian economy, says a study of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The study named “India Inc. Investing… A Mid Year Report 2008" adds that the third quarter of the previous fiscal saw an accelerated growth in the investment climate with a total investments pick up from Rs 1,58,377 (Aug-Sept 2007-08) to Rs 6,11,704 crore in the third quarter of the previous fiscal.

It points out that out of the total investments announced during the first six months of the current fiscal, capital outlay ranging “between Rs 1,000 crore to Rs 10,000 crore” accounted for a major share of 33.50 per cent. The announcements in this category were made by companies like Mesco Steel, Aditya Birla Retail, Essar Shippings Ports among others.

Investments announcements ranging between Rs 10,000 crore to Rs. 20,000 crore accounted for 25.46 per cent by companies like Aircel, Vedanta Group, Cals Refineries. Large sized investment announcements of more than Rs 40,000 crore, accounted for 18.08 per cent share in the total capex plans announced by the corporate India.

The report estimates that total direct and indirect employment opportunities of three lakh would be generated in three to four years and that the top five employment generating companies would be Rayon Fashion, Genpact, Mahindra World City, Religare Finvest and Himalaya International.