New Delhi: Four of the top five states that attracted large bank-funded projects in FY 2023-24 were governed by the Bharatiya Janata Party (BJP), a study by RBI economists has revealed.
Gujarat, Maharashtra, Karnataka, Andhra Pradesh and Uttar Pradesh, among the top five, accounted for nearly 55% of the total cost of projects sanctioned, around Rs 3,90,978 crores, during 2023-24 according to the report.
Of the 22 states mentioned in the study, bank-financed projects shot up by 225% (Chhattisgarh*) to 60% (Madhya Pradesh) in at least eight BJP-ruled states, while some with state elections scheduled in 2024 also saw a significant increase.
The study analysed the cost of the projects financed by banks and financial institutions in FY 2023-24 which ended in March 2024. These include all public sector banks, major private sector and foreign banks and financial institutions like Industrial Financial Corporation of India (IFCI), Life Insurance Corporation (LIC), Power Finance Corporation (PFC), Rural Electrification Corporation of India (REC) and Export-Import Bank of India (EXIM).
The study said that 54% of the allocated amount was planned to be invested by the end of FY2023-24, 30% is slated for FY 2024-25 and the remaining 16% is set to be invested in the subsequent years.
Gujarat bagged 154 projects in 2023, up from 82 in the year before, accounting for 14.7% of the total project sanctions or roughly Rs 57, 473 crores. It replaced UP at the number one spot which bagged 69 projects in 2023, up from 45 in the year before.
Interestingly, even though the number of projects increased in UP, its share in total projects decreased from 16.2% last year to 7.6% in 2023-24.
Maharashtra saw a 94% increase in projects with 93 projects allocated in 2023, up from 48 in 2022, while Karnataka, ruled by the BJP until May 2023, received 61 projects, up from 37 in 2022.
Andhra Pradesh, which was gearing up for state elections held in June this year, bagged 51 projects in 2023, up from 27 the year before. The state is now ruled by BJP ally Telugu Desam Party.
Other BJP-ruled states that saw massive increase in bank-financed projects in 2023 are: Chhattisgarh (225% increase), Rajasthan (177%), Haryana (79%) and Madhya Pradesh (60%). Chhattisgarh has been ruled by the BJP since December 2023.
Among states with elections scheduled in 2024, projects in Punjab increased from 21 to 34 in 2203 while Jammu and Kashmir bagged 36 projects, up from 23 the year before.
Odisha, which held state elections in 2024, saw its projects increase from 12 to 23. However, it slipped to the sixth spot in 2023-24 accounting for just about 7.6% share in total projects financed by banks and financial institutions from the third spot in 2022-23 during which it accounted for 11.8% share, the Economic Times reported.
“The total cost of projects sanctioned by banks/[financial institutions] increased to a record high of Rs 3,90,978 crore. Infrastructure sector continued to attract the major share of envisaged capital investment, led by ‘Roads & Bridges’ and ‘Power’ sectors, reflecting the government push towards infrastructure development,” RBI’s report, authored by Kamal Gupta, Rajesh B, Kavediya, Sukti Khandekar and Snigdha Yogindran said.
