Fresh investments attracted by states has grown eight per cent in value during April-December of this financial year as against the comparable period of FY18. The investments are premised on the Industrial Entrepreneurs Memorandum (IEMs) filed.
The proposed investments totaled to Rs 3.35 lakh crore at the end of December 2018 rising from Rs 3.15 lakh crore in the year-ago period. There was a marked increase in the number of IEMs, rising from 1443 to 1735, data sourced from the Department of Industrial Policy & Promotion (DIPP) showed.
Data on investment intentions based on IEMs filed shows a positive trend. “For the period April to December there was an increase in the number of IEMs filed as well as the proposed investment. While these refer to only intentions, it is still positive from the point of view of reflecting potential investment”, a report by CARE Ratings stated.
For calendar year (CY) 2018, metals sector grabbed the highest share of proposed investments at 20.8 per cent followed by electrical equipment (12.5 per cent), chemicals (10.9 per cent), textiles (5.4 per cent) and food processing (5.1 per cent). Among states, Karnataka leads with 19.8 per cent share of the investments drawn with Maharashtra following closely at 18.8 per cent.
“IEMs implemented in CY 2018 were the highest at Rs 2.55 lakh crore in the last three years. They were Rs one lakh crore in 2016 and Rs 0.71 lakh crore in 2017. Maharashtra dominated among the states with a share of 51 per cent while electrical equipment, chemicals and metals accounted for a little over 25 per cent of total IEMs implemented”, the report noted.
“There are signs of investment intentions being positive albeit to a limited extent. Juxtaposing this with improved capacity utilization rates, it is possible to say that the future looks positive in the absence of any shock or disruption. Higher quantum of projects dropped is a concern as it makes one look at investment intentions with a bit of caution”, it added.