Only 11 percent of investments announced in manufacturing sector actually recorded: Study

New Delhi, Mar. 13 (ANI): Projects with investments worth just Rs. 1.6 lakh crore i.e. a meagre 11 percent of total investments worth about Rs. 15 lakh crore announced in manufacturing sector across India have actually been recorded as of September 2015, according to a recent study by apex industry body ASSOCHAM.

“Manufacturing sector in India attracted live investments worth about Rs. 33 lakh crore i.e. about one-fifth of the total live investments worth over Rs. 164 lakh crore attracted by various sectors across India as of September 2015,” noted the study titled ‘Impact analysis of delay in investment implementation in manufacturing’, conducted by the ASSOCHAM.

“Metal and metal products alone accounted for almost half (48 percent) of the total live investments attracted by manufacturing sector in India followed by chemicals and chemical products (24 percent), machinery (8 percent), transport equipment (7 percent), construction material (7 percent), food and agro based products (three percent),” highlighted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).

Odisha has topped with over 17 percent share in the total live investments attracted by manufacturing sector followed by Gujarat (12 percent), Karnataka (11 percent), Jharkhand (nine percent) and Chhattisgarh (seven percent).

The projects with about 37 percent of the total live investments attracted by manufacturing sector remained under implementation as of September 2015 i.e. 1,160 projects with investments worth over Rs. 12 lakh crore.

Amid states, over 68 percent manufacturing projects in Rajasthan have remained under implementation followed by Haryana (67.5 percent), Bihar (63 percent), Assam and Uttar Pradesh (62 percent).

“Considering that long delays in projects’ implementation hurts investors’ sentiment, the government needs to have a strong plan to prioritise speeding up stuck projects’ effective implementation by creating a target-oriented roadmap,” said ASSOCHAM secretary general D.S. Rawat while releasing the findings of the chamber’s study.

“Even investors should be penalised if projects get delayed due to improper planning, change of ownership, lack of finance, absence of co-ordination with contractors and other related issues,” said Rawat.

Highlighting the impact of delay in implementation of projects in manufacturing sector across India, the ASSOCHAM study noted that out of 1,160 projects that are in different stages of implementation, 422 projects have reported time or cost overruns worth about Rs. nine lakh crore i.e. almost 50 percent of the actual investment.

Of these 422 delayed projects, only 80 projects have declared employment potential and these projects alone could generate 4.5 lakh employment opportunities.

Manufacturing projects in the steel sector are facing maximum cost escalation with a share of over 50 percent followed by refinery (28 percent).

Ownership-wise, projects in manufacturing sector that are owned by private players account for over 62 percent share followed by that of public sector (38 percent share).

Delayed projects facing cost escalation have maximum share of 31 percent in Odisha followed by Karnataka, Rajasthan and Jharkhand (nine percent share of each).

Manufacturing projects that are under implementation in Telangana are facing maximum cost escalation of over 73 percent of the actual cost followed by Odisha (71 percent), Jharkhand and Rajasthan (66 percent). (ANI)

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