₹2.1 trillion worth of new projects were announced across the country in the December-ended quarter, up nearly 15% from the preceding three-month period, showed data from the project-tracking database of the Centre for Monitoring Indian Economy (CMIE). While capital expenditure proposals were still sharply weaker than the year-ago period, when projects worth ₹9.5 trillion were announced, the latest figure marks a sharp turnaround after two quarters of precipitous decline. The data is provisional, and may be updated later.
In a welcome shift of trend, private companies led the way this time. The most notable private sector announcements included JSW Neo Energy’s pumped storage power project in Almora worth ₹15,000 crore and Welspun New Energy’s Green Ammonia manufacturing unit project worth ₹13,860 crore in Odisha. “New investment proposals continue to be buoyed by expectation of policy continuity at the Centre [after the Lok Sabha polls later this year], which is the base case assumption," said Anitha Rangan, economist at Equirus.
“Particularly after the recent results of state elections, this view has further cemented, which is positive for the investment cycle." Meanwhile, the public sector’s appetite for fresh capex planning continued to shrink. Suvodeep Rakshit, senior economist, Kotak Institutional Equities, said the space for a sustained government capex thrust would be now diminishing as the Centre’s priority of fiscal consolidation was coming back into focus. While the investment mood appeared to revive, it was not a broad-based recovery.
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