Pvt investments plunge to 25% in FY18; fall 1,200 bps from FY08 high

Source: The Hitavada      Date: 06 Oct 2018 10:53:28




THE share of private investments in the infrastructure sector has fallen to a decadal low of around 25 per cent in FY18 steeply down from a high of 37 per cent in FY08, says a report.

Private investments, which averaged 37 per cent between fiscals 2008 and 2013, fell by 600 basis points (bps) between fiscals 2013 and 2017 to 31 per cent, which fell a steep 600 bps further to 25 per cent in FY18, as a plethora of stalled projects and stressed assets dampened investor interest and risk appetite.

“A material ramp-up in Government spending in the past few years has meant the share of private investments in infrastructure has fallen to a decadal low of around 25 per cent in FY18,” according to an Crisil InfraIndex. This means that between fiscals 2008 and 2018, there was a massive plunge of 1200 bps in private investments.

While the highways sector has seen a revival in public private partnerships (PPPs), and the renewables sector some buoyancy, private investments in other infrastructure segments have remained stagnant or weak, the report said.

“Resumption and broad-basing of private investments are critical to sustain the share of infrastructure investments at around 6 per cent of GDP over a medium-to- long-term,” Crisil Managing Director, Ashu Suyash said in the report.