Has India's investment cycle turned the corner?

Moneycontrol BureauInitiatives lined up by the government including higher Budgeted capital outlays to pep- up the investment cycle in the country seems to be bearing fruit albeit not at the pace as one would have liked.

Capital goods industry, the key indicator of traction in capital formation, remains in the negative and no real progress has been seen in industrial growth either. But, a note by rating agency CARE point out certain interesting data points released by the government that indicated the cycle could have turned.

"There  are  early  signs  that  the  investment  climate  may  be  looking  up.  But, this is not yet well- spread and is concentrated in specific industries and states,"says a report by ratings agency CARE.

Data from the government suggests investment intention has seen slight uptick during the first half of calendar 2016 with number of investment proposals increasing to 1,206 from 1,018 during the same period in 2015.

Electrical equipments and textiles remained top spaces that saw significant jump up in the intent to invest.Among states, Gujarat and Karnataka managed to grab the highest share of investment intention.

The CARE report has also pointed to another interesting data point by CMIE which suggests projects dropped for the January-June period in 2016 were lower at Rs 5.21 lakh crore as against Rs 7.05 lakh crore during the same period last calendar.

"This evidentially has to become more pervasive before it may be concluded that the cycle has turned," the CARE note says.