Wednesday, 09 Oct, 2024
By: Yash Gupte
According to the most recent Survey of Project Investment in India, new investment rose by a staggering 91.97 percent year over year in FY2023. Image Source: IANS
Among all the major sectors, manufacturing sector has emerged as the dominant sector in terms of investment, with its share in total fresh investment increasing from 41.93 percent in FY2022 to 53.66 percent in FY2023.
The Financial Year 2022-23 and the Quarter 4 of the FY22-23 (January to March) witnessed a happy ending as the Q4 recorded the highest ever total fresh investments of Rs 14.6 lakh crore, dominated by private sector outlays that also hit an all-time high of Rs 10.5 lakh crore. According to the most recent Survey of Project Investment in India, new investment rose by a staggering 91.97 percent year over year in FY2023. The public sector also boosted its investment pledges by 94.76 percent, while the private sector nevertheless retained its dominance in the project investment environment. The new investments increased significantly from Rs 19,27,214.28 crore in FY2022 to Rs 36,99,673.33 crore in FY2023. The overall number of projects climbed from 10,445 in FY2022 to 10,509 in FY2023.
New businesses including Green Hydrogen, Semiconductors & Display Fabs, Electric Vehicles, and Data Centres garnered high-ticket investment intents, while sectors like Roadways, Solar Power, and Real Estate continued to attract increased new investments. While both the public and private sectors recorded substantial increases in fresh investment in FY2023, the private sector witnessed an increase of 90.71 percent in FY2023 over the 144.39 percent growth it had seen in FY2022. The fact that the private sector provided almost two-thirds of the overall investment in each fiscal year demonstrates its dominance.
In FY2023, 3,804 new projects of Rs 25,31,800.03 crore were launched by the private sector, making up 68.43 percent of all new investments declared during the survey period. On the other hand, 6,705 new projects worth Rs 11,67,873.30 crore were launched by the public sector (including Central and State), representing a 94.76 percent increase from the previous year. In the Public sector, the Central government units announced 1,696 projects worth Rs 5,62,083.37 crore and the state-owned agencies announced 5,009 projects worth Rs 6,05,789.93 crore during FY2023. Critical sectors like Green Hydrogen and Ammonia, Semiconductors and Fabs, Pharma-APIs, Solar & Hydel power, Ports, Real Estate, and Data Centres received around 64 percent of private sector investment.
Source: Projects Today
However, the majority of public sector investment was limited to the areas of social and transportation infrastructure, such as water supply schemes, irrigation, roads, railroads, and community services.
Nearly 9.6 lakh crore in new manufacturing investments were made in Q4 of 2022–23, which is almost three times more than the average for the preceding three quarters. The share of planned manufacturing outlays increased from an average of 45 percent to almost 66 percent of all investments declared in the first three quarters. Between Q1 and Q3, the overall share of private investments was 65 percent, whereas Q4 saw an increase to 72 percent.
Among all the major sectors, manufacturing sector has emerged as the dominant sector in terms of investment, with its share in total fresh investment increasing from 41.93 percent in FY2022 to 53.66 percent in FY2023. Though the number of projects declined from 2,759 in FY2022 to 1,912 in FY2023, new projects outlay in the manufacturing sector more than doubled, from Rs 8,08,159.35 crore in FY2022 to Rs 19,85,343.05 crore in FY2023.
Source: Projects Today
Talking about the infrastructure (social and transport) sector, investments grew from Rs 8,88,348.91 crore in FY2022 to Rs 11,76,512.34 crore in FY2023. The number of new projects also increased from 7,141 to 7,883. Around 70 percent of the entire new investment announced in the infrastructure sector and 22 percent of the total new investment announced in FY2023, respectively, went to the roads, real estate, data centres, and water supply sectors.
Following the 174.9 percent increase in new investment intentions, the electricity sector's portion of the investment pie increased from 7.75 to 11.1 percent. From Rs 1,49,393.57 crore in FY2022 to Rs 4,10,678.25 crore in FY2023, the amount of new investment increased. While new Solar Power projects have received the majority of investment in this industry in recent years, promoter interest in building up Hydel Power projects has recently increased.
On the other hand, the mining sector witnessed a decline in investments. From Rs 68,089.92 crore to Rs 65,252.14 crore, investment in new projects decreased by 4.17 percent. In the mining sector, 83 new coal mining projects of Rs 22,500 crore and 22 iron ore mining projects for Rs 18,245 crore were announced during FY2023.
Source: Projects Today
In case of states, Andhra Pradesh topped the chart by attracting 306 projects worth Rs 7,65,030 crore in FY2023. Gujarat stood second with 1,008 new projects worth Rs 4,44,420 crore. Another southern state, Karnataka, edged out Maharashtra, which finished second last year, to take third place. In FY2023, the state received 992 new projects totaling Rs 4,32,703.72 crore.
In terms of the total number of new projects, Maharashtra continued to lead the states. Maharashtra attracted 1,639 new projects worth Rs 3,71,194.80 crore during FY2023. Odisha, Uttar Pradesh, Rajasthan, Tamil Nadu, Telangana, Madhya Pradesh, and West Bengal were among the other states that made it to the top 10 list. The top three states together accounted for 44.3 percent of the total fresh investment, even though the top 10 states accounted for 90 percent of the total fresh investment announced in the nation during FY2023. In addition, Andhra Pradesh, Karnataka, Gujarat, Maharashtra, and Odisha were the private sector's top picks for investment locations, in that order.
