New investment announcements in the first nine months (9M) of FY25 rose by a robust 39 per cent year-on-year (y-o-y) to more than ₹32 lakh crore as compared to ₹23 lakh crore in the year ago period, with power sector leading the announcements, according to SBI Research.
The power sector accounted for 42 per cent of the total new investment announcements, followed by building infrastructure (23 per cent), manufacturing (19 per cent) and transport infrastructure (10 per cent), among others.
SBI’s economic research team noted that new investment announcements, which were around ₹10 lakh crore during 2020/21, improved to more than ₹37 lakh crore in last two years (FY23/FY24), supported by both Government as well as private participation.
They observed that the share of private participation in the investment announcements also improved during last two years from around 50 per cent in FY21 to around 68 per cent in FY22 and FY23 and is more than 70 per cent in 9MFY25.
- Also read: IT department prescribes conditions to avail presumptive taxation for foreign sea cruise players
“While the investment from Government touched 4.1 per cent of GDP in FY23, the highest since FY12, private corporation investment as a percentage of GDP touched 11.9 per cent — the highest since FY16… FY24 data to be released on end-February is likely to show private investment closer to 12.5 per cent of GDP in FY24 itself,” said Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI.
In FY17, in new investment announcements, the share of Government and private sector was 71.36 per cent and 28.64 per cent, respectively.
In FY23, the share of Government in new investment announcements declined to 31.33 per cent, while that of private sector increased to 68.67 per cent. However, in FY24, the share of Government in new investment announcements rose to 40.43 per cent, while that of private sector declined to 59.57 per cent.
Gross block
Apart from new investment announcements, SBI’s research team said addition in gross block is another important data point. Gross Block is the total book value of tangible assets ( valued at their cost of acquisition) owned by a company.
SBI Research observed that the gross block of Indian Inc., represented by around 4500 listed entities, increased from ₹73.94 lakh crore as of March 2020 to ₹106.50 lakh crore as of March 2024.
“What is pertinent to mention is, on an average, Indian Inc. have added more than ₹8 lakh crore of gross block yearly in last five years. In addition, robust capital work in progress of ₹13.63 lakh crore, as of March’2024, suggest robust addition in coming years too,” Ghosh said.
