Investments contract in first 4 months of FY18

Increase in Centre's capex offset by declining state capex

An investment revival looks increasingly unlikely in the immediate future. 

The capital goods segment in the Index of Industrial Production (IIP), a proxy for investment demand, has contracted for four straight consecutive months, showed the latest data. Since September last year, it has contracted every month, barring two. 

Of the principal drivers of capital expenditure (capex), only the central government seems to be doing the heavy lifting. 

Central government capex has grown at a robust 33.4 per cent in the first four months of the current financial year (FY18). But this has been offset by a fall in state governments’