- 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.
- 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.