Good days are here! Time gap between announcement and execution of plans is shrinking

It seems the time duration between the announcement of an investment plan and beginning the actual work, to implement it, is reducing under the leadership of Prime Minister Narendra Modi as 38% of the 970-odd investment plans announce earlier is already on execution mode.

According to a CMIECII analysis of investment projects from May 2014, more than a third of investment plans worth Rs 10 lakh crore announced during 2014-15 had already started by July 2015.

It is important to mention that 90% of these investment plans were announced after Modi came to power in May 2014, signalling that India Inc's elation at the election outcome is beginning to reflect in boardroom decisions.

As per an economic outlook put out by the Centre for Monitoring Indian Economy (CMIE) last week, projects worth Rs 6.5 lakh crore, including those announced in the past and put on hold by promoters for a variety of reasons, have begun seeing ground level activity in this period.

Of this, projects worth Rs 4.5 lakh crore have come under implementation mode in 2014-15, and investments worth Rs 2 lakh crore have started moving at the ground level in the first quarter of this fiscal.

Indian conglomerates such as the Tata group and Adani group are leading from the front, with each of them announcing 15 new investment projects since May 2014. However in terms of value, the Adani group is far ahead, with just five of its power and renewable energy projects envisaging an investment of over Rs 1.22 lakh crore.

Indigo Airlines' announcement to acquire 250 A-320 planes from Airbus is the largest investment plan to come up under the Modi government, followed by Adani Renewable Energy's solar park projects in Rajasthan worth Rs 60,000 crore and a Rs 40,000 crore LCD panel fabrication plant announced by Vedanta.

Chandrajit Banerjee, director general at the Confederation of Indian Industry or CII, said: "Our analysis clearly indicates that there has been a new momentum in both investment and economic activity in the last 15 months. We are confident that this will steadily increase as the invest ment climate is picking up."

The CMIE said, citing the rise in investment plans and projects under implementation, "Fresh project announcements in India have also increased since the new government came into power... The implementation rate has also improved."

That machinery firms recorded the first rise in quarterly sales in the past three years in the first three months of 2015-16 signals a revival in capital expenditure, it said.

(Image: Indiatimes)