Govt’s infra push drives up project tenders in Q3 - Hindustan Times
close_game
close_game

Govt’s infra push drives up project tenders in Q3

ByTanya Thomas, Mumbai
Jan 20, 2021 06:10 AM IST

Rising spending on productive assets such as roads, ports and factories support economic growth but the slow pace of growth in the December quarter indicates that recovery may still be on shaky ground and state governments have not fully recovered from the economic disruption caused by the pandemic.

Announcements of new capital expenditure plans, a key measure of government and private spending in capacity building, continued to grow in the December quarter after grinding to a near halt at the beginning of the fiscal year.

In the public sector, major areas of new spending were roads, water supply, community services, and irrigation
In the public sector, major areas of new spending were roads, water supply, community services, and irrigation

New project spending announced in the December quarter rose by 10.29% from the preceding three months, according to data from Projects Today, which monitors the activity. In all, 2,085 new projects, entailing a total investment of Rs.2.76 lakh crore, were announced in the fiscal third quarter. Total investment had doubled sequentially in the second quarter, albeit on a smaller base.

Hindustan Times - your fastest source for breaking news! Read now.

Rising spending on productive assets such as roads, ports and factories support economic growth but the slow pace of growth in the December quarter indicates that the recovery may still be on shaky ground and that state governments have not fully recovered from the economic disruption caused by the pandemic. Declining tax collections have crimped their ability to spend more.

In the public sector, major areas of new spending were roads, water supply, community services, and irrigation while the private sector stepped up investments in drugs and pharmaceuticals, metals, electronics and automobiles.

The private sector accounted for 711 new projects, entailing a total investment of Rs.1.36 lakh crore, a 36.5% rise from the preceding three months. On the other hand, government-sponsored project expenditure plans fell in the third quarter, declining 7.21% from Q2. Private foreign investment in capital goods fell 34% as well.

State governments which account for more than half of all government-funded capital expenditure in the country have had to resort to deep spending cuts this fiscal to redirect resources towards fighting the pandemic. The Centre has stepped up efforts to fill in some of this vacuum, but faced with the prospect of fiscal deficit widening to 7.5-8% this year, its firepower is also limited.

“For sure, there’s an uptick on the number of projects being announced,” said Sandeep Gulati, managing director, Egis India, an engineering firm.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On