The total cost of projects sanctioned by banks and financial institutions (FIs) jumped by 85 percent to Rs 2.66 lakh crore in the fiscal year (FY) 2022-23 from Rs 1.43 lakh crore in FY 2021-22, the Reserve Bank of India (RBI) Bulletin showed on August 17.
"The envisaged capital investments of private corporates, based on the projects sanctioned by banks/FIs, increased for the second consecutive year after remaining subdued during 2019-20 and 2020-21," the RBI bulletin said.
The infrastructure sector continued to attract maximum capex projects,
led by ‘road & bridges’ and ‘power’ sectors, reflecting the government’s push towards infrastructure development, the central bank added.
The RBI bulletin is a monthly publication written by the central bank's staff, providing insights into key developments in domestic and global economies. It is important to note that the views expressed in the Bulletin do not necessarily represent the official views of the central bank.
"Of the total cost of projects, around 35 percent is likely to be spent during 2023-24 and about 25 percent in the subsequent period," the bulletin said.
The bulletin highlighted that forward-looking enterprise surveys conducted by the Reserve Bank of India (RBI) and by other agencies showed an overall improvement in credit demand and other factors.
"Improved capacity utilisation, pick-up in credit demand, and improved business expectations are pointing towards reinvigoration of investment activity in the Indian economy in the period ahead," the bulletin said.
Cautioning, the bulletin said: "Overall, the investment cycle appears to
be poised to gain momentum going ahead, but, its sustainability needs to be watched closely."
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