As per the 84th Survey of Projects Investment in India, after a fall of 18 percent in Q1/FY22, fresh investment increased by 14.86 percent in Q2/FY22 on quarter-on-quarter basis. The second quarter (July-September 2021 or Q2/FY22) saw announcement of 2,669 new projects with a total investment commitment of Rs 3,84,291.01 crore.

The increase in new investment intentions by the Central government-owned PSUs and private promoters led to increase in both new projects and new investment planned therein in Q2/FY22. Lifting of restrictions on running public transport system, factories and offices following the fall in number of COVID-19 cases also enabled resumption of capex activities across the country.

Indicating the increasing appetite of the Private sector in capacity addition, the number of mega private projects increased from 42 (total investment: Rs 2,15,389.29 crore) in H1/FY20 to 70 (Rs 3,10,837.45 crore) in H1/FY22, recording a growth of 44.31 percent.

During the first half of FY22 (i.e. April-September 2021 or H1/FY22) fresh investment grew by 13.42 percent on H1-o-H1 basis. As against the fresh investment of Rs 6,33,831.27 crore announced in H1/FY20, new investment of Rs 7,18,863.53 crore was announced in H1/FY22.

A swift recovery in fresh investment by the Central government agencies in Q2/FY22 after a fall of 42.8 percent in the preceding quarter could not reverse the negative trend seen in the government sector in Q1/FY22 as new investment proposals from state government agencies continued their declining trend in Q2/FY22 too. As a result, the overall fresh investment by the government sector declined by 24.54 percent in H1/FY22 vis-a-vis H1/FY20 fresh investment statistics.

On the brighter side, private fresh investment not only maintained its Q-o-Q growth seen since Q2/FY21, but also surpassed the H1/FY20 figures in H1/FY22 by a healthy 48.94 percent. As against 1,955 new projects worth Rs 3,27,411.28 crore announced in H1/FY20, the first half of FY22 saw announcement of 2,012 new projects worth Rs 4,87,633.95 crore.

Among the major sectors, Manufacturing recorded a stellar growth both in terms of new projects and investment planned therein. In H1/FY22, in all 1,212 new manufacturing projects worth Rs 2,78,606.6 crore were announced vis-à-vis 731 new projects worth Rs 86,168.12 crore announced in H1/FY20. As a result, the share of Manufacturing in the total fresh investment increased to 38.76 percent.

While the Central government intends to spend around Rs 111 lakh crore on infrastructure building in India, at ground level barring a few sub-sectors like Water Distribution and Treatment, Roadways and new Data Center projects, all other sectors registered negative growth in fresh investment in H1/FY22 vis-a-vis H1/FY20. Consequentially, the total fresh investment in Infrastructure sector declined by 24.64 percent in the first six months of FY22.

India’s exponential growth in data consumption and cloud computing in recent years has created huge demand for data centres. To meet this rising demand, investment in setting up data centres increased impressively since 2020. During the first six months of FY22, 19 more data centres were announced. Around Rs 34,500 crore will be invested in setting up these centres planned across major cities of India.

The top five states — Gujarat, Maharashtra, Telangana, Karnataka and Odisha — together accounted for around half of the total fresh investment announced in H1/FY22. Gujarat topped the table with 612 new projects worth Rs 1,32,169.47 crore. Followed by Maharashtra and Telangana with total fresh investment of Rs 1,03,106.70 crore and Rs 55,670.30 crore respectively.