Investments: Gujarat leads but share down

Mumbai, August 15 : The corporate sector seems to have reshuffled its investment pattern across the states in 2007-08 with many hitherto laggard managing to attract fresh investments, if a Reserve Bank of India study is any indication. Gujarat is still the numero uno state when it comes to investment in new projects, but its share in total investments has fallen during the year 2007-08. While Maharashtra, Orissa and Chattisgarh have increased their share, many others like Chattisgarh, Madhya Pradesh and West Bengal — which were lagging behind last year — have also improved their shares, according to a study on corporate investments by the RBI.

The share of Gujarat — which upstaged Maharashtra for the top rank in 2006-07 — in total costs of projects planned in 2007-08 at 22.0 per cent (Rs 62,442 crore) was lower than 25.8 per cent (Rs 73,170 crore) observed in 2006-07, still substantially higher than any of the remaining states. Maharashtra, which ranked second, increased its share to 12.7 per cent (Rs 36,202 crore) from 8.6 per cent (Rs 24,330 crore).

In an indication that investments are spreading to backward states, Orissa secured the third rank by more than doubling its share to 10.9 per cent from 5.2 per cent (Rs 14,806 crore). Chattisgarh got huge investments of Rs 17,671 crore (6.2 per cent share) in 2007-08 as compared with Rs 2,365 crore earlier. MP’s share has improved to 2.2 per cent from 1.7 per cent and Communist-run West Bengal nearly doubled its share to 2.1 per cent. UP, the most populous state, maintained its share at 3.5 per cent.

In another signal of the spreading investment plans of India Inc, multi-state projects attracted investments of Rs 36,698 crore (12.9 per cent) as against Rs 25,428 crore (9 per cent) previously. Gujarat was not alone in losing the share. Tamil Nadu, Karnataka and Rajasthan also lost the share. The RBI’s estimate of total cost of 910 projects at 2,84,371 crore in 2007-08 was marginally higher than the total envisaged cost of Rs 2,83,440 crore from 1054 projects in 2006-07. According to the RBI, the total capital spending envisaged for the year 2007-08 was higher at Rs 2,45,107 crore, which though indicates a moderation in annual growth over a high base, still reflects sustained strong capital expenditure. “Infrastructure projects, in particular the power projects, continue to dominate the scene for two consecutive years in...

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