Proposed and disposed – 2

The first time I did a post with the above title was in May 2016. Now, this is a sequel. Comments from the Centre for Monitoring Indian Economy (CMIE) on the fall in investment proposals have garnered reasonable attention and publicity. See here, for example. It is a bit difficult to believe that investment proposals up to the end of December quarter could be presented within a few days (holidays included!) of the end of the quarter.

One can go by the data available from the Secretariat for Industrial Approvals (SIA) housed in the Department of Industrial Policy and Promotion (DIPP). They have data for the year 2016 (calendar year) up to November. It is true that ‘Industrial Entrepreneurs’ Memoranda(IEM)’ – investment proposals – submitted in November were on the low side. If one went by the data for the previous four months, they were as follows:

Month Number of proposals Amount of investment proposed (Rupees Crores) Expected employment generation
July 206 76,117.0 47,331.0
August 161 37,532.0 48,497.0
September 204 47,391.0 40,473.0
October 150 41,630.0 23,500.0
November 148 14,527.0 35,395.0

Big drop in the proposed investment amount in November. Surprisingly, expected employment generation is higher than in October.

Natural curiosity is to examine the Implementation vs. Proposals. Hence, the blog post title. This is for the calendar year 2016 up to November.

IEM Numbers Amount (Rupees Crores)
Proposed 2047 390,271.0
Implemented 473 90,106.0

The ratio of Implemented/Proposed seems to be in line with the trend in recent years. See my blog post from May 2016.

Pity that DIPP does not give us data on employment actually generated. So, the truth is that November data shows a big drop in the proposed investment amount.

One side note or end note: If one clicked on ‘Graphical Representation’ here, one notices the big spurt in proposed investment amounts. You have to scroll down in the top panel of the web page to see ‘Graphical Representation’ link. Proposed investment really surged from 2007 to 2011. It appears that companies really believed that India had breached the growth barrier and was on a permanently high growth path. Shows how much of actual research they did before they made investment plans.

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