According to State Bank of India (SBI’s) Economic Research Department (ERD) report, new investment announcements in India surged by a robust 39% Year-on-Year (Y-o-Y), to over Rs 32 lakh crore in the first 9 Months(April –December) of Financial Year 2024-25 (9MFY25) from Rs 23 lakh crore during the same period in the last year. This growth reflects the sustained momentum in investment activities across India.
- It also highlighted that domestic investment announcements in India during the last two FYs (FY23 and FY24) have witnessed a significant increase of Rs 37 lakh crore.
Key Findings:
i.The report revealed that the share of private participation in the investment announcements has increased from around 50% in FY21 to around 68% in FY22 and FY23, which is more than 70% in 9MFY25.
ii.The report observed that the share of government in new investment announcements decreased to 31.33% in FY23, while that of the private sector increased to 68.67%.
- However, the share of government in new investment announcements increased to 40.43% in FY24, while that of private sector decreased to 59.57%.
iii.The report showed that investment from government reached 4.1% of Gross Domestic Product (GDP) in FY23, the highest since FY12. While, investment from private companies touched 11.9% of GDP in FY23, the highest since FY16.
iv.As per the report, Gross Block of Indian Inc., representing around 4500 listed entities, increased from Rs 73.94 lakh crore (as of March 2020) to Rs 106.50 lakh crore (as of March 2024).
- Also, an average of over Rs 8 lakh crore has been added annually to the corporate gross block over the last 5 years.
Note: Gross Block refers to the total book value of tangible assets (valued at their cost of acquisition) owned by a company.
v.The report showed that Household Net Financial Savings (HNFS) in India increased from 5.0% (in FY23) to 5.3% (in FY24). Also, savings in physical assets increased from 12.9% of GDP (in FY23) to 13.5% (in FY24).
New Announcements in Different Sectors :
i.The report highlighted that the manufacturing sector saw maximum announcements of 1,493 projects worth Rs 5,97,921 crore during 9MFY25.
ii.The Power sector with 1,172 projects attracted the largest investment value worth Rs 13, 58,783 crore.
- It is followed by the mining sector (with 72 projects worth Rs 56,628 crore) and oil and gas sector (with 62 projects worth Rs 35, 623 crore.)
Contribution of ECBs:
i.As per the report, External Commercial Borrowings (ECBs) continues to be one of the funding source for India Inc., with outstanding ECBs stood at USD 190.4 billion (as of September 2024), a marginal increase from the previous quarters.
ii.The report revealed that Non-Rupee and Non-Foreign Direct Investment (FDI) components account for USD 155 billion, providing stability due to lower volatility from hedging.
iii.Private Companies accounted for around 63% (USD 97.58 billion) of these ECBs, while public sector companies accounted for the remaining 37% (USD 55.5 billion).
iv.The overall cost of ECBs registered during 9MFY25 declined by 12 basis points (bps) to 6.6% Y-o-Y.
About State Bank of India(SBI):
Chairman- Challa Sreenivasulu (C.S.) Setty
Headquarters- Mumbai, Maharashtra
Established– 1st July 1955
Tagline-The Banker to Every Indian
