RBI hopes for investment turnaround in FY2015

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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