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Decline in investment growth can be arrested: RBI

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Chennai, Sep 10 :

The Reserve Bank of India (RBI) in its latest bulletin released Wednesday said there is hope that the decline in investment growth rate could be arrested this fiscal.

The central bank of India in an article “Corporate Investment: Growth in 2013-14 and Prospects for 2014-15” published in the bulletin said: “As evidenced from various economic indicators, there is a renewed hope that this decline could be arrested in 2014-15.”

Reserve Bank of India
Reserve Bank of India

According to the article, an estimated capital expenditure of Rs.2,513 billion would have been incurred during 2013-14 showing a decline of 17.9 percent over the previous year.

According to the RBI, based on the plans up to 2013-14, the capital expenditure already planned in 2014-15 aggregated Rs.1,242 billion.

For improving the level of aggregate capital expenditure in 2014-15 from that of 2013-14, a capital expenditure of more than Rs.1,270 billion would need to come from new investment intentions of the private corporate sector in 2014-15, which seems to be attainable with the steps being taken to bolster investor confidence, the RBI said.

According to the Reserve Bank, the estimate of capital investment likely to be incurred during the current financial year is based on time phasing details of the investment intentions of the companies which have raised funds from banks/financial institutions or through external commercial borrowings (ECB), domestic equity issues and foreign currency convertible bonds (FCCB).

Capital expenditure envisaged from pipeline projects is also estimated for the year 2014-15.

During the five-year period of 2009-10 to 2013-14, states like Odisha, Maharashtra, Andhra Pradesh, Gujarat and Chhattisgarh received higher private corporate project investments which were financed through the banks/FIs, ECB/FCCBs and/or by domestic equity issues.

(IANS)