New Project Investments Fall Sharply In June Quarter, Says CMIE

New project investments in June quarter fell to its lowest level since Narendra Modi became India’s prime minister in 2014.

304 new projects with investments worth Rs 0.43 lakh crore were announced in the quarter ended June, according to data released by the Centre For Monitoring Indian Economy. That’s a 87 percent drop from the same quarter last year when 1,085 new projects were announced worth Rs 3.4 lakh crore.

India’s economy is staring at its worst slowdown in five years as Finance Minister Nirmala Sitharaman prepares to deliver her first Union Budget on July 5. Economic growth has been hit by the slowdown in consumption and a sharp fall in investments during the January-March period. Investments, as reflected by gross fixed capital formation, grew at 3.6 percent in Q4 compared to 10.6 percent in Q3, according to government data.

CMIE’s project announcement data, while volatile and not an accurate picture of the overall investment environment, paints a more grim picture of the economy in the first quarter of financial year 2018-19.

Commissioning of projects during the quarter fell 61 percent on a yearly basis, CMIE said. Projects with investment worth Rs 0.53 lakh crore were commissioned. These numbers, however, are expected to be revised upwards since the data comes with a lag, CMIE said.

There were fewer projects that were stalled though—21 project investments worth Rs 0.11 lakh crore. That’s an improvement from the Rs 2.68 lakh crore worth of projects stalled in the previous quarter.