Odisha tops with 17% share in total investments attracted by manufacturing sector in India: Study

Odisha has recorded max. share of 31% in cost-escalation faced by delayed projects across India

Odisha has topped with over 17 per cent share in the total live investments worth about Rs 33 lakh crore attracted by manufacturing sector across India, according to a recent study by apex industry body ASSOCHAM.

Gujarat has ranked second in terms of share in total outstanding investments attracted by manufacturing sector in India followed by Karnataka (11 per cent), Jharkhand (nine per cent) and Chhattisgarh (seven per cent)noted the study titled 'Impact analysis of delay in investment implementation in manufacturing,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Manufacturing sector in India attracted live investments worth about Rs 33 lakh crore i.e. about one-fifth of the total live investments worth over Rs 164 lakh crore attracted by various sectors across India as of September 2015, highlighted the study prepared by ASSOCHAM Economic Research Bureau (AERB).

Metal and metal products alone accounted for almost half (48 per cent) of the total live investments attracted by manufacturing sector in India followed by chemicals and chemical products (24 per cent), machinery (8 per cent), transport equipment (7 per cent), construction material (7 per cent), food and agro based products (three per cent), the reported noted.

In Odisha, metal and metal products have acquired over 79 per cent share in total investments attracted by manufacturing sector followed by chemical and chemical products (15 per cent), transport equipment (three per cent), construction material (one per cent).

Projects with about 37 per cent of the total live investments attracted by manufacturing sector remained under implementation as of September 2015 i.e. 1,160 projects with investments worth over Rs 12 lakh crore, it added.

Amid states, Rajasthan has over 68 per cent manufacturing projects under implementation followed by Haryana (67.5 per cent), Bihar (63 per cent), Assam and Uttar Pradesh (62 per cent).

However in Odisha about 39 per cent manufacturing sector projects have remained under implementation as of September 2015.

Considering that long delays in projects' implementation hurts investors' sentiment, the government needs to have a strong plan to prioritise speeding up stuck projects' effective implementation by creating a target-oriented roadmap, said the ASSOCHAM study.

Even investors should be penalised if projects get delayed due to improper planning, change of ownership, lack of finance, absence of co-ordination with contractors and other related issues, it added.

Highlighting the impact of delay in implementation of projects in manufacturing sector across India, the ASSOCHAM study noted that out of 1,160 projects that are in different stages of implementation, 422 projects have reported time or cost overruns worth about Rs nine lakh crore i.e. almost 50 per cent of the actual investment.

Of these 422 delayed projects, only 80 projects have declared employment potential and these projects alone could generate 4.5 lakh employment opportunities.

Manufacturing projects in the steel sector are facing maximum cost escalation with a share of over 50 per cent followed by refinery (28 per cent).

Ownership-wise, projects in manufacturing sector that are owned by private players account for over 62 per cent share followed by that of public sector (38 per cent share).

Delayed projects facing cost escalation have maximum share of 31 per cent in Odisha followed by Karnataka, Rajasthan and Jharkhand (nine per cent share of each).

Manufacturing projects that are under implementation in Telangana are facing maximum cost escalation of over 73 per cent of the actual cost followed by Odisha (71 per cent), Jharkhand and Rajasthan (66 per cent).

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