The Hindu Business Line : Tardy implementation mars India Inc's investment plans

CORPORATE India has announced huge investments in the 2003-04. But, there appears to be many a slip between the announcement of a project and its implementation.

For every Rs 100 worth of investments announced, only Rs 38.34 worth of projects have take off, according to a survey conducted by Projects Today, a division of the Mumbai-based Economic Research India Ltd. This ratio has not changed much from the previous years.

Despite a robust growth in project announcements, stagnant pace of implementation suggests that these projects could take a much longer time to show up in India Inc's growth numbers.

Public sector companies continued to steer the growth in investments accounting for 64 per cent of the total project investment.

Public sector investments rose 17 per cent, while the overall investments rose only 12 per cent. Interestingly, public sector projects took off at a faster pace as compared to the private sector.

Forty one per cent of the projects announced by the public sector passed on to the implementation stage, while only 33.7 per cent of the projects announced by the private sector took off.

The survey also indicates that foreign investments in Indian projects have been declining over the past couple of years.

Such foreign investments declined 3.8 per cent in 2003-04 on top of the decline of 2.2 per cent in the previous year.

The investments were confined to small companies in the manufacturing and service sectors.

Foreign investments also had a lower implementation rate. Only 26.9 per cent of the projects announced by foreigners moved to the implementation stage. Worse still, foreign direct investment in Indian projects at $3.109 billion in 2003 was the lowest in the past five years.

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