Lapataganj of dropped govt and private sector projects hits a high

The previous high of projects for which there is no information was in March 2019, an election year

Lapataganj was the story about a small town the system forgot, imagined in the work of Hindi satirist Sharad Joshi. A similar Lapataganj (lost place) of forgotten government and private sector projects grew at its fastest pace in March.

The value of projects dropped – due to no information being available – rose to Rs 4.5 trillion, shows an analysis of data from the Centre for Monitoring Indian Economy. CMIE uses company statements, media reports and contacts promoters and contractors to track projects. When there is no information about a project for quite some time, it is ‘dropped’. The latest value of such dropped projects beat the previous high of Rs 4.4 trillion in March 2019 as seen in chart 1 (click image for interactive link).

The government had Rs 2.31 trillion worth of dropped projects. It was Rs 2.18 trillion for the private sector. In value terms, the last three quarters have had more government projects being affected than those in the private sector. This is unlike previous election cycles. More private sector projects dropped out due to lack of information compared to government ones in 2019 and 2014 (chart 2).

This comes on the back of new project announcements hitting their second-highest mark, of Rs 11.3 trillion, in March 2024. The previous high was in March 2023 when new project announcements hit Rs 16 trillion. The surge last year was driven by large aircraft orders. The rise in new projects this time is across sectors, indicating a secular recovery in investment. Larger investments by companies can help economic growth. Some old projects may well be left behind as new ones come up. 

Manufacturing accounted for the largest share of projects dropped due to lack of information, showed rolling 4-quarter data. It is followed by the electricity and non-financial services sectors (chart 3).

The value of projects dropped due to no information declined from their high after election season in 2019. Voting in 2024 is to end in June.