Fresh investments in India have plunged to a 13-year low as stalled projects rise. In an interview to CNBC-TV18, Mahesh Vyas, MD & CEO of Centre for Monitoring the Indian economy (CMIE) spoke at length on what the infrastructure space can expect in this scenario from Budget 2018.
Vyas said that the capacity utilisation whether in manufacturing or power sector is so low that there is no good reason to believe that demand will pick up and therefore there is no good reason why industry should invest again.
He further said that while new investments were falling, the completions were increasing in last two years. However, we have seen a sharp fall in project completion this year.
He further added that due to lower demand, we expect project completion to be low in the near future.
According to him, there is delay in project completion essentially in power and metal sector. Transport infrastructure is also facing stress in terms of project completion, he added.
Talking about Budget expectation, he said the government needs to put in money through Public Works Department (PWD) with help of private sector partnerships, he said.
Vyas mentioned that the overall spending of government needs to increase.
For entire discussion, watch accompanying videos.
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