Data compiled by CMIE on new investment projects announced — a good indicator of investment intentions in the Indian economy — shows that the aggregate amounted to Rs 5.18 trillion in FY21, which is the lowest since FY05, when it was Rs 5.63 trillion, according to the CARE Ratings report Investment in FY21: A Retrospective.
In FY05, this level was a part of the increasing trend witnessed since FY03. Since then, investment intentions were always above Rs 10 trillion each year, with the figure in seven of these years being more than Rs 20 trillion.
The lower level of investments announced is also indicative of the fact that the increase in borrowing witnessed last year — which was subdued — was not for investment, and could have been more for working capital as well as refinancing.
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