Report: New projects investments rose nearly 24 percent to Rs 3.64 crore crore in the June quarter.

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Led By Private sector capital expenditure, new project investmentsAccording to a report, the June quarter saw a 23.7 percent increase to Rs 3.64 million crores, compared to the previous year. This amount is however 38.5 percentage lower than in the fourth quarter last financial year.

Project investments rose 130.2 percent annually to Rs 5.91 lakh crore in the quarter ended FY22 Brickwork RatingsIn a Friday report.

Since the pandemic’s onset, new project investment has been steadily declining. However, it improved in the fourth quarter FY22.

However, there are still uncertainties due to the extended Russia-Ukraine WarInvestment sentiment has been impacted by the resulting sanctions as well the continuing shortage of chips and the rising interest rate. The report stated that the number of projects announced for the fiscal first quarter has dropped by more than half to 247, compared with 545 in prior quarters.

Similar results were seen in the decline in new government projects to 59. This is a drop of just Rs 32,700 crore. Meanwhile, the private sector announced 188 new projects, which was worth Rs 3.3 lakh crore.

The fourth quarter of FY22 saw private capital expenditures of Rs 3.9 crore crore and government spending at Rs 2.11 lakh crore.

The report stated that despite higher capital expenditures announced in the budget the government is still spending. This is due to constrained fiscal conditions, rising inflationary pressures, and delays in disbursing Rs 1 lakh crore loan at zero interest rate to the states.

The June quarter has seen states be cautious about investing in new project development. Only 8 percent of all the new projects announced in June quarter by governments were undertaken by states.

The FY23 budget has Rs 7.5 Lakh crore for capital expenditure, which is 24.5 percentage more than the FY22 revised estimates. PTI BEN RAM

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