New projects under implementation see 10 percent rise

Value of the investment of projects under implementation in the first quarter of 2010-11 in 20 major states has increased from Rs.42.9 trillion to Rs.47.3 trillion, says a study by the The Associated Chambers of Commerce and Industry (Assocham).

At the same time, the study also suggested non-availability of funds with the corporate sector, since just 48.9 percent of the total investments worth Rs.104.94 trillion that was pledged were actually under implementation.  "It may be noted that owing to the prevalence of global recessionary trends and slow down of the Indian economy, investments in the sates were kept on hold during most of 2008-09," said the chamber.

"Unstable external and internal economic conditions and credit crunch are main reasons for opting out. Those states that try to address the genuine concerns of investors to the possible extent are witnessing higher implementation rates."

The study found that at 64 percent, Uttar Pradesh saw the highest rise in implementation of projects pledged, followed by Haryana (40 percent), Kerela (32 percent), Orissa (18 percent), Uttarakhand (18 percent and Karnataka (10 percent). The study said some states logged single digit growth rates, with Tamil Nadu and Jammu and Kashmir clocking 9 percent, Bihar 7 percent, Maharashtra 6 percent, West Bengal 4 percent, Andhra Pradesh 3 percent and Assam, Gujarat and Jharkhand 1 percent each.

Some states like Punjab, Madhya Pradesh, Chhattisgarh, Himachal Pradesh and Rajasthan did not see any rise in the value of projects put to implementation, said the study. In terms of the quantum of investments under implementation as in June, Maharashtra was at the forefront, followed by Orissa, Gujarat Andhra Pradesh, Tamil Nadu, Uttar Pradesh, Haryana, West Bengal and Karnataka.

The Assocham study concluded that the growth in the amount of investments and higher implementation rate in some states also explained the exceptional performance seen in the capital goods industry. Latest data on industrial production showed that a 63-percent jump in the output of capital goods, pushed India's industrial growth up by 13.8 percent in July, as against 7.1 percent in the previous month.