Various factors including global economic uncertainty, high interest rates and the lack of new policy initiatives have driven new project announcements in the country to its lowest in the past couple of years.

“The new project announcements by Indian corporates are drying up rapidly. In September quarter this year, only 770 projects worth Rs 2.60 lakh crore were announced. This is the first time in two years that project investments were below 1,000. Also, the cost of new projects announced in the September quarter was the lowest in the last nine quarters and second-lowest in the last 21 quarters,” the Centre for Monitoring Indian Economy (CMIE) said in its latest Economic Intelligence Service.

Project investments are the number and value of industrial entrepreneur memoranda filed with the government, letters of intents issued by authorities, amount sanctioned and disbursed by financial institutions, capital raised for project investments, foreign collaborations approvals and the aggregate results of CMIE’s Quarterly Survey on Investment Projects.

India Inc has been witnessing a slowdown in new project announcements for the past year. From a quarterly average of Rs 5.90 lakh crore in 2008-09, new investment announcements declined to Rs 4.20 lakh crore per quarter in 2009-10. Except in the June 2010 quarter, new project announcements in quarters remained around Rs 3 lakh crore till June 2011 which slipped further to Rs 2.60 lakh crore in September quarter, CMIE said.

The big-ticket projects that were announced include the 9,750-MW hydel power project worth Rs 1 lakh crore by NTPC in Arunachal Pradesh. Roughly 80% of all investments announced during the quarter belonged to the government.

The CMIE data reports that 120 projects worth more than Rs 2 lakh crore were stalled in the September quarter, the highest in value terms in the last 15 years.

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