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In Q1/FY21, the country underwent one of the longest and stringent lockdowns, which started from 25 March 2020. Though Unlock 1.0 was announced on 8 June 2020, economic activities across the country have commenced at a very low pace. The intensity of the pandemic has not yet diluted. Millions of labourers who migrated to their homes have not shown any urgency to return to their worktowns
By Mr. Shashikant Hegde, CEO, Projects Today

The 82nd Survey of Projects Investment in India conducted by Projects Today indicated a healthy quarter-on-quarter growth of 33.4 percent in fresh investment in the last quarter of the fiscal 2020-21 (Q4/FY21).

The quarter saw announcement of 2,647 new projects with a total investment intention of Rs 3,93,464.66 crore as against 2,210 new projects worth Rs 2,94,978.97 crore in Q3/FY21. The last quarter also saw announcement of 87 mega projects (Rs 1,000 crore or more) vis-a-vis 62 such projects a quarter ago. The quarter also saw the return of government agencies to the projects investment arena after their dismal performance in Q3/FY21.

The heightened performance in the last quarter of the fiscal 2020-21 helped to limit the year-on-year decline in fresh investment to just -1.23 percent. Notably, FY21 also saw announcement of 8,551 new projects worth Rs 10,72,330.36 crore as against 9,307  projects worth Rs 10,85,731.33 crore in FY20.

Projex by Ownership

In response to the stimuli doled out by the government in the wake of COVID-19 induced lockdown, the private sector carried its stellar performance of Q3/FY21 in Q4/FY21 too. On top of 770 new projects worth Rs 1,57,667.43 crore in Q3/FY21, the private sector announced 919 new projects worth Rs 2,26,213.44 crore in Q4/FY21 and recorded a growth of 43.48 percent.

Some of the notable private sector projects were — integrated steel project of ArcelorMittal Nippon Steel worth Rs 50,000 crore at Kendrapada in Odisha; four solar power projects of the Adani Group worth Rs 12,000 crore; Rs 5,000 crore paint project of Grasim Industries and Rs 4,691 crore solar photovoltaic modules project of SunEdison Energy India.


The third quarter had seen a steep fall in government investment in the form of fresh investment and such investment declined by 11.29 percent. If this had continued in the last quarter, the overall growth seen in the last quarter would not have been possible. However, on a refreshing note, both Central and state government agencies reversed the declining trend and announced 1,728 new projects worth Rs 1,67,251.22 crore and registered a growth of 21.8 percent on Q-o-Q basis. While the Central government companies announced 458 new projects worth Rs 76,184.63 crore, state-owned agencies announced 1,270 projects worth Rs 91,066.59 crore.

While a bulk of the investment from Central government agencies was concentrated in the Roadways, Railways, Solar Power, etc sectors, state investment was spread across the Roadways, Water Supply Schemes and Sewerage Systems and Irrigation sectors. The four projects, a part of the Ganga Expressway worth around Rs 22,125 crore by the Uttar Pradesh Expressways Industrial Development Authority, were the major projects announced in the sector in Q4/FY21.

Projex by Sectors

Among the major sectors, barring the Mining sector, all the other sectors recorded healthy growth rates in Q4/FY21.The Manufacturing sector posted a healthy growth of 40.58 percent on top of 88.35 percent growth recorded in Q3/FY21.

Major SectorsManufacturing: In all, 518 new projects entailing a total projex of Rs 1,11,458.89 crore were announced in Q4/FY21. Of this, 12 were mega projects (project outlay of Rs 1,000 crore or more) promising to bring in investment of Rs 74,999 crore. In the preceding quarter, 506 new projects worth Rs 79,285.4 crore were announced comprising 11 mega projects of Rs 49,975 crore.

Within the Manufacturing sector, sub-sectors like Industrial Alcohols, Drugs & Pharma, Paints, Steel, Cement, Electronics, etc attracted a good amount of fresh investment intentions.

The Drugs & Pharma sector continued to attract more new projects for manufacturing bulk drugs and active pharmaceutical ingredients. In all, 127 drugs and pharma projects with a total investment outlay of Rs 6,219.58 crore were announced in Q4/FY21. Following the outbreak of COVID-19, we expected increased investment in this sector in FY21. Echoing our expectation, the sector attracted 468 new projects worth Rs 22,894.72 crore in FY21.

The quarter saw announcement of 48 alcohols & derivatives projects worth Rs 6,073.55 crore. Most of the projects intend to manufacture industrial alcohols, ethanol, methanol, etc.

A bulk of the fresh investment seen in the Steel sector was accounted for by a single project of ArcelorMittal Nippon Steel in Odisha. The foreign steel major in joint venture with Nippon Steel intends to set up Rs 50,000 crore, 12 million tonne integrated steel mill at Kendrapada in Odisha. A few years back, ArcelorMittal had announced similar size investment plans in Odisha, Jharkhand and Chhattisgarh. The erstwhile Odisha project was shelved for want of land and approvals for mining, and no progress has been reported on its Chhattisgarh and Jharkhand plans.

An Rs 4,629 crore solar photovoltaic modules (Tamil Nadu) project by SunEdison Energy India and an Rs 2,500 crore lithium-ion batteries project at Tiruvallur in Tamil Nadu by Lucas-TVS and an Rs 1,200 crore wind turbines & rotor blades (Chennai) project by Nordex SE at Chennai were some of the large investment intentions seen in the Machinery & Electronics sector.

Compared to the preceding quarter, fresh investment announcements in the Food Processing, Cement and Automobile sectors recorded a decline.

Electricity: In recent years, the Electricity sector had attracted good investment intentions from both the private and government sectors. However, Q3/FY21 had seen announcement of only 52 new projects worth Rs 9,233.41 crore. But in the last quarter of FY21 (Q4), the sector witnessed reversal of the trend and saw announcement of 89 projects worth Rs 63,901 crore. A bulk of these investments was in the Non-conventional Solar and Wind power sectors.

In all, 45 solar power projects worth Rs 42,236 crore across India and four wind projects (all in Karnataka) worth Rs 8,400 crore were announced in Q4/FY21. Of this, 19 projects were of mega size. Among private investors, the Adani Group accounted for Rs 17,100 crore of investment in six solar and one wind power projects.

Mining: After attracting several mega investment proposals in Q2/FY21 & Q3/FY21, fresh projex in the coal and ore mining sectors dried up in Q4/FY21. As a result, the total fresh investment in the Mining sector declined by 69.76 percent in the last quarter of FY21. In Q2 & Q3, in all, 31 coal projects worth Rs 24,249.6 crore and 25 metallic ore projects worth Rs 15,663.3 crore were announced.

Infrastructure: A rebound in the announcement of new infrastructure projects by both the Central and state government agencies helped the Infrastructure sector to maintain its steady growth observed since Q2/FY21. In all, 1,918 new projects with an investment intention of Rs 1,91,327.85 crore were announced in this major sector in Q4/FY21.

Among sub-sectors, the Roadways (42.57 percent), Community Services (17.39 percent), Water Supply (9.74 percent) and Railways (4.15 percent) sectors accounted for a bulk of the fresh investment.

Roads and highways building activities, which gained pace in Q3/FY21, continued the momentum in Q4/FY21 too. In all, 458 new road projects worth Rs 81,439.72 crore were announced in the last quarter. Of this, 30 projects worth Rs 53,918.51 crore were of mega size.

The Uttar Pradesh Expressways Industrial Development Authority announced four different segments of Ganga Expressway project entailing a total investment of Rs 22,125 crore. Eleven construction companies have shown interest in building this 594 km long six-lane expressway.

The National Highways & Infrastructure Development Corporation (NHIDCL) has taken up 17 new projects worth Rs 3,264 crore in Assam, Arunachal Pradesh, Ladakh, Manipur and Mizoram states. The National Highways Authority of India (NHAI), which recently crossed its daily highway building pace of 35 km, announced 64 more new projects with an investment of Rs 43,091.38 crore in Q4/FY21. Of this 26 were mega projects (see Top Five Projects below). In FY21, NHAI announced 152 new highways with a total investment of Rs 84,743.08 crore.

Of the 36 new railway projects announced in Q4/FY21, Rs 2,110.15 crore Varanasi-Mughalsarai Line in Uttar Pradesh and Rs 1,495.85 crore Degana-Rai Ka Bagh Railway Line Project in Rajasthan of the North Western Railway were notable projects.

Construction: The Construction sector, where project execution activities came to a complete standstill following the announcement of the nationwide lockdown, had recorded a decline of 20.28 percent in Q3/FY21. However, following the unlocking of the economy and return of labourers, construction activities picked up in Q4/FY21. The quarter saw announcement of mega residential-cum-commercial complexes by builders like Shapoorji Pallonji, Aparna Construction, ABIL Buildcon, Vasavi Homes, Kakade Group, etc.

Real Estate, Commercial Complexes and Industrial Parks together saw announcement of 479 new projects entailing a total investment of Rs 58,433.48 crore in Q4/FY21. This indicated a very healthy Q-o-Q growth of 47.41 percent. Of the three sub-segments, Real Estate saw fresh investment increasing from Rs 15,634.61 crore in Q3/FY21 to Rs 38,905.36 crore in Q4/FY21.

Irrigation: The announcement of new irrigation projects in states like Andhra Pradesh, Karnataka, Madhya Pradesh and Tamil Nadu, saw fresh investment in this sector increasing by a healthy 30.1 percent. In the preceding quarter such investment had declined by 59.9 percent.

The Rs 5,434.79 crore Chinki Boras Barrage Combined Multipurpose Project and the Rs 2,959.29 crore Sanwer Micro Lift Irrigation Scheme of the Narmada Valley Development Authority; and the Rs 1,554.22 crore Mudivedu Balancing Reservoir Project and the Rs 1,304.11 crore Somasila Kandaleru Flood Flow Canal Project of the Irrigation & CAD Department, Andhra Pradesh, were the notable projects announced in this sector in Q4/FY21.

Projex by States

Mostly aided by Rs 50,000 crore integrated steel project of ArcelorMittal Nippon Steel India at Kendrapada in Odisha, the state managed to top the table of fresh investment in Q4/FY21. In all, the state attracted 107 new projects worth Rs 62,352.28 crore.

The second-ranked Maharashtra attracted 325 new projects worth Rs 40,902.06 crore, followed by Andhra Pradesh with 72 new projects worth Rs 39,610.92 crore.

In terms of the number of new projects, Gujarat stood second with 312 new projects worth Rs 20,334.12 crore. Of this, 204 projects were from private project promoters.

Odisha, Andhra Pradesh and Karnataka were the three states to corner around half of the total fresh projex announced by the Private sector in Q4/FY21.

Top 10 StatesProjex Funnel (as on 31 March 2021)

The projex funnel (outstanding projects investment) increased by 6.20 percent during FY21. As of 31 March 2021, there were 78,271 projects entailing a total investment of Rs 1,64,37,923 crore (USD 2.22 trillion) in various stages of implementation. Of this, 17,709 projects with a total projex exposure of Rs 61,87,368 crore (USD 835 billion) were under execution, indicating a project execution ratio of  37.64 percent.

An indicator of the pace of projects execution at ground level, the project implementation ratio improved from 36.69 percent in March 2020 to 37.64 percent in March 2021. This is the highest project execution ratio recorded since March 2016.

Ownership wise breakup of the aggregate projects investment indicated that dominance of the government sector continued in March 2021 too, with the sector accounting for 67.51 percent of the total envisaged investment. The increase seen in fresh investment announcements by the private sector in the last three quarters of FY21 saw its overall share in the total investment pie increasing from 31.73 percent in March 2020 to 32.49 percent by March 2021.

Though the share of the Manufacturing sector improved a little from 16.08 percent in March 2020 to 16.45 percent in March 2021, it is far off from the 20.0 percent share it used to enjoy five years ago. Since the private sector investment dominates this all-important sector, unless we see a major upward swing in private investment, the share of this sector in total investment will remain at around 16 percent in the current fiscal too.

Among the states, Maharashtra topped the investment table both in terms of the number of projects as well as investment planned therein. As of March 2021, the state had 10,128 projects with a total lined up investment of Rs 20,18,087 crore.

The second-ranked Andhra Pradesh was way behind in terms of both projects and projex. As of March 2021, the state had 3,632 projects worth Rs 14,66,457 crore. The state was followed by Gujarat (5,369 projects worth Rs 12,55,799 crore); Odisha (4,013 projects worth Rs 11,97,262 crore) and Karnataka (6,695 projects worth Rs 9,91,724 crore).

The top five states accounted for 38.12 percent of the total projects and 42.15 percent of the total projects investment.


The investment-related stimulus announced by the Central government since March 2020 and the liberal Monitory Policy adopted by the RBI in FY21 have indeed led to a faster recovery in the projects investment activities in the country. Though we are far away from the high growth seen in projects investment in FY19, the investment trends of the last two quarters do indicate that the journey towards normalcy has begun. Not for nothing, the IMF recently increased the projected GDP growth of the country from 11.5 percent to 12.5 percent in FY22.

After having said this, the increasing number of CORONA cases since March 2021 in some large states and the looming danger of declaration of complete/partial lockdown to contain this pandemic would certainly act as a big hurdle in returning to economic normalcy.

Given the precarious situation, the government should step up its investment plans and intensify the vaccination drive across the country. The private sector would require policy support and some hand-holding by the government to sustain the growth in project investment in FY22.

We expect projects investment to firm up further in FY22 and reach the high levels of FY19 on the back of ramped up vaccination drive by the Central and State governments.


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