Private sector investment may see rise

Private sector investment may see rise

News:

  1. As per the latest data by the Centre for Monitoring Indian Economy (CMIE), the value of new project announcements by the private sector rose for the first time in two years.

Important facts:

  1. The data revealed the following facts:
  • Private sector new project announcements, worth 2.02 lakh crore in the June 2018 quarter, grew 43% over what was announced in the same quarter of the previous year.
  • This is the first quarter of growth in this category since June 2016.
  • Contrary to this, the government announced new projects worth 27,453.4 crore in the June 2018 quarter, a contraction of 77.6% over the June 2017 quarter.
  • This marks the fifth consecutive quarter of contraction in the value of government new project announcements.
  • However, the new project announcements do not provide a complete picture of investment activity in the country.
  • There are two major issues due to which the private sector got a jolt- Demonetisation and GST.
  • Within private sector new project announcements, the bulk of the growth was due to the announcements made by the foreign companies.
  • New project announcements by the Indian private sector accounted for 30.4% of all announcements made by the private sector in the June 2018 quarter.
  • The foreign private sector, in comparison, accounted for an overwhelming 69.6% of such announcements.
  • For the revival of the private sector specifically MSMEs, the government has taken a few steps.
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