‘FY24: new private investments dip 15%; States lead capex rise’
Value of new private investment projects dipped 5% to ₹35.22 lakh crore, with fresh manufacturing outlays sliding a sizeable 40%: Projects Today
Fresh private sector investment plans fell 15.3% in 2023-24, while foreign investors slashed new outlays by almost a third, dragging down the value of new investment announcements in India by almost 5% from the record high of almost ₹37 lakh crore in 2022-23.
The drop in investment plans was most visible in the manufacturing sector, where proposed outlays slid an alarming 40% from ₹19.85 lakh crore in FY23 to less than ₹11.9 lakh crore in 2023-24, the latest data from investment tracking rm Projects Today show.
Manufacturing’s share in new investments, declined to 33.8% of the ₹35.22 lakh crore outlays announced last year, from almost 54% in 2022-23. Irrigation and mining investments tanked 48.7% and 19.25%, respectively, while electricity and infrastructure clocked upticks of 96% and 22%, respectively.
State governments led the capex growth, ramping up spends on new investment projects by 27% to almost ₹7.69 lakh crore, while the value of the Centre’s fresh projects rose 8.4% to ₹6.09 lakh crore.
Maharashtra bagged the maximum new projects with proposed outlays of almost ₹8 lakh crore, replacing Andhra Pradesh (AP), which had attracted the most investments in 2022-23. In FY24, AP attracted ₹1.06 lakh crore and was ranked ninth.
Gujarat retained its second position with its share of investments almost unchanged at about 12%, while Karnataka slid one place to the fourth rank over the past year. Among the big gainers was Odisha, which rose two places to third, despite an 11.4% drop in investment value (₹3.23 lakh crore).
Tamil Nadu’s rank surged from eighth to fth, as its share in new investments rose to 7.7%, from under 5% in 2022-23. The State attracted commitments of ₹2.71 lakh crore, an almost ₹1 lakh crore uptick year-on-year.
“We believe that the pace of new investment announcements might slow down in the rst quarter of this year due to the extended general election period,” said Shashikant Hegde, director and CEO at Projects Today. “However, with the new government assuming oce in June, the ow of fresh investment is expected to gain traction,” he added.
‘Timely execution key’
To keep the capex cycle ticking, the new government would not only need to usher in further reforms but also ensure that the ₹72.22 lakh crore of investments announced in the last two years saw timely execution, he stressed.
“Any delays in implementation of projects, especially those announced in critical sectors like green hydrogen, semiconductors, electric vehicles, transport infrastructure, hydel and solar power, could impede the growth trajectory of the Indian economy in the coming years,” he said.