New Delhi: The private sector investment plans took a hit in the October-December 2024 quarter, falling 1.4% from the previous quarter due to rising input costs and inflation.
Domestic investors scaled back their fresh investment plans in Q3, with a 1.4% decline from the previous quarter, totalling Rs 6.11 lakh crore. Additionally, the private sector’s share of new investment projects decreased to 62.2% in Q3, down from 66.2% in Q2, according to data from Projects Today, The Hindu reported.
“The slowdown in domestic private investments reflects the apprehensions of India Inc. over rising input costs and geopolitical uncertainties,” Shashikant Hegde, director and CEO of Projects Today told TH. Projects Today is a firm which tracks India’s investment projects since 2000.
On the other hand, government capex plans saw a significant boost, with state governments announcing fresh investments worth Rs 2.28 lakh crore, surpassing the Centre’s Rs 2.05 lakh crore announcements in Q3. Rajasthan emerged as a surprise leader, with fresh project outlays rising almost three times over Q2 to about Rs 2.25 lakh crore.
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The infrastructure sector saw a marginal 0.8% growth in fresh outlays, but new electricity projects grew 21.9% to Rs 4.5 lakh crore, accounting for the largest share of 39.3% in new investments through Q3.
The decline in private sector investment was also reflected in the announcement of mega projects, with 228 projects worth Rs 7.69 lakh crore announced in Q3, down from 232 projects worth Rs 8.4 lakh crore in Q2.
Similarly, the Centre for Monitoring Indian Economy (CMIE) data revealed that India witnessed a significant slump in new project announcements in the December quarter, with investments totalling Rs 6 trillion, down 22% from the same period last year and 16% from the previous quarter, Mint reported. However, according to CMIE, both government and private sectors scaled back new investment plans, with the government experiencing a more pronounced decline in investment momentum.
The December quarter also saw a significant slowdown in project completions, with the total value of completed projects plummeting 52% year-on-year to Rs 91,952 crore, down from Rs 1.9 trillion in the same quarter last year, as per the Mint report.
