Amid factors like improved gross fixed capital formation and higher government expenditure, credit rating agency, Care Ratings in its latest report has said that the investment climate in India has improved. The rating agency also highlighted rising government’s spending in the sectors like infrastructure, housing and defence.
As per the report, overall capex of the government in the first 7 months of the year increased to Rs 1.77 trillion from Rs 1.62 trillion last year. Besides, capacity utilisation has also been picking up in recent times (Q1FY18 to Q4FY18). But, Care Ratings pointed that capacity utilization had a dip in the last available quarter (Q1FY19) and would need watching, noting that lower capacity utilisation can disincentives companies’ new investments.
Besides, Care Ratings said that during April-Sep 2018, new investment projects have fallen and the same happened in completed projects. The rating agency further said that implementation stalled projects have also fallen. However, improvement seen in projects revived.
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