Financial Year 2018-19 Had Worst Fresh Investment Proposals In 14 Years: Report
A new data released by the CMIE on April 1 shows that the fresh investment proposals have hit a new low. The country in the fiscal year 2018-19 hardly managed to reach Rs 9.5 trillion of investment. This is the lowest investment proposal recorded in a year since 2004-05.
According to the report, the estimate of Rs 9.5 trillion will be revised upwards in the upcoming weeks, however, the country’s struggle to attract new investors in the year 2018-2019 cannot be underestimated. The fiscal year 2018-19 align with the country’s downhill trend in new investment proposals. This is the fourth consecutive year that the country is exhibiting such a poor performance. The declining trend started in 2015-16.
During the period 2006-07 to 2010-2011, the country’s new investment proposals boomed taking the average fresh investment to Rs 25 trillion a year. Soon after this, the new investment proposals stumbled to Rs 10 trillion by 2013-14. The scenario changed, soon after the current government rose to power in 2014. In the financial year 2014-2015, the investment proposals escalated to Rs 21 trillion in a short period of time.
However, the very next financial year 2015-2016, the investment proposals dropped by Rs 1 trillion. This sudden boost in the investment proposals was short lived.
Private and Public sector suffered
On comparing the investments in two periods (2006-11 and 2014-16), the role of the private sector in driving investment can be noted. For instance, in the earlier period, the average share of the private sector in total new investment proposals comprised of 62% in comparison to 47% in 2014-2016. Through this figure, one can easily take away that the private sector did not get along with the government’s proposal. However, interestingly, the private sector’s share reached an all-time high of 67.5 % in 2018-19, but one-fifth of the private sector’s investment proposals made in the year were stalled.
Though the public sector’s share is more in comparison to private, its low value of new investment proposals in 2018-19 is noticeable. For the year 2018-2019, the public sector announced projects of Rs 3 trillion. The drop in government (public sector) proposals has badly impacted on infrastructure sectors. The service sector has severely dropped from 51% in the past two years to 39% in the 2018-19 pulling down the new investment proposals in the roads sector. The railway sector too could not get out of the clasp of poor investment.