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Big investment in core sector

NEW DELHI: A little over 81 per cent of around Rs. 419,334 crore ($104 billion) of planned private investment by India Inc. in the third quarter of the current fiscal have gone into core, physical and service infrastructure indicating that if bottlenecks are removed for the infrastructure sector, the volumes of such investment could multiply manifold.

Recording this finding, the Assocham Investment Meter (AIM), which analysed Indian industry’s third quarter private investments announcements and plans, pointed out that a total investment of Rs. 419,334 crore was made across 28 sectors. Out of this, Rs. 341,308 crore ($85 billion) went to core, physical and service infrastructure, which in percentage terms works out to a little over 81 per cent.

Releasing the findings, Assocham President, Venugopal N. Dhoot, said while steel with $31 billion remained the single major source of investment generation, the other industries attracting substantial capital expenditure included oil ($16 billion), power ($13 billion), telecom ($8.2 billion), real estate ($6.2 billion), cement ($4.8 billion), shipping and logistics ($2.8 billion), ports ($3 billion) and aviation ($30 million).

With high domestic and export demand, huge capacity expansion is under way in the steel sector as the major producers announced investment plans of $31 billion (Rs. 123,700 crore) contributing a share of 36.5 per cent. Abhijeet Group is the major contributor $13 billion (Rs. 55,000 crore) in the sector as the amount would be invested for building steel plants in West Bengal, Jharkhand and Maharashtra, said Mr. Dhoot.

Similarly, the demand for oil and petroleum has led companies to provide a capex of $16 billion (Rs. 62,850 crore) in the sector. The major contribution came from Essar Oil with a capital announcement of $6 billion (Rs. 24,000 crore). The third largest investments were announced in the power generation sector worth $13 billion (Rs. 54,144 crore).

The major investment announcements in the sector were made by L&T worth $5 billion (Rs. 20,000 crore) for generating power. This was followed by Neyveli Lignite Corporation which intended to invest $4.3 billion (Rs. 17,500 crore) for setting up mine and thermal power station in Perambulur district, Tamil Nadu.

The telecom sector contribution to total investment in the quarter under review is $8.2 billion (Rs. 33,080) crore.

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