Moderation in investments doesn't mean recovery stalling:StanC

The moderation in investments in second quarter of this fiscal was due to a dip in private sector's outgo in metals industry and it does not raise question marks over the country's economic recovery, says a report by Standard Chartered.
Latest data from Centre for Monitoring Indian Economy (CMIE) points to incremental investments being flat on a sequential basis after rising for four consecutive quarters due to decline in private sector's investments, especially in the metals sector, the British brokerage said.
"We will await more clarity in the coming quarters rather than concluding that the recovery has stalled based on one quarter of data," it said.

It said the projects under implementation was flat in the July-September period as compared to an average increase of Rs 2 trillion in the previous four quarters.
The government's projects under implementation rose by over Rs 1.2 trillion during the quarter, while for private sector, there was a dip of Rs 1 trillion.
There was an increase of Rs 1.1 trillion in stalled projects to Rs 9.8 trillion, which is the highest since 1990s, it said, adding that a majority 71 per cent of the increase in stalled projects has came from the metals sector.

On the stalled projects front, it said the amount has been declining by an average of Rs 50 million every quarter since mid-2014.

It said government investments have remained strong, which is driving the investment activity, but pressure to adhere to the fiscal deficit targets is a risk.
Another risk is the global slowdown, which can hurt India as well, it acknowledged.
On the positive side, it pointed out to an uptick in new project announcements, which rose for the fifth consecutive quarter.
Projects entailing an investment of Rs 3.5 trillion were announced during the quarter, as against an average of Rs 2.6 trillion in the previous four quarters, it said.