Project completion highest in years, pipeline robust
In a period of unpleasant news for Govt, the Centre for Monitoring the Indian Economy (CMIE) has sprung a pleasing surprise. In its latest data, the research body CMIE held that projects worth Rs 4 Lakh Crore were completed in FY12, the highest in the last few years. In the previous couple of years, the corresponding numbers were Rs 3.4 lakh crore and Rs 3.8 lakh crore, respectively.
There’s more pleasant news: The existing pipeline of projects is strong enough to sustain for the next several years. And, FY12 has seen a dramatic pick-up in completion of some of those outstanding projects. As per CMIE, at the end of March 2012, outstanding investment in projects totalled nearly Rs 140 lakh crore. That is 6 times India’s yearly Gross Fixed Capital Formation. As per CMIE, the pipeline of outstanding projects is so large that even if no new project is declared for the next 4-5 years, the Indian economy can preserve to grow at a fast pace.
It is for this reason that the completion of outstanding projects is a far more significant number to look out for than fresh projects. In all the noise about a slowdown in fresh investments, this rise in project completion has gone unobserved.
- The Centre for Monitoring Indian Economy is an independent economic think-tank headquartered in Mumbai, India.