One of the biggest holes the Indian economy must fill has grown deeper. Yesterday, the Reserve Bank of India released its annual report (pdf) revealing a huge drop in private investment. For infrastructure, the past year's decline was even more substantial:
Envisaged investment in infrastructure declined by 52 per cent to Rs1.0 trillion from Rs2.2 trillion in the previous year, with power and telecom accounting for most of this fall. Investment in telecom sector has dried up, while that in road, ports and airports has also decelerated sharply. More than half of the envisaged corporate fixed investment in large projects has been coming from infrastructure since 2008-09. Its share, however, dropped to 48.6 per cent in 2011-12 from 54.8 per cent in 2010-11. This has had a ripple effect on the economy.
That halving comes from a variety of sources---poor monsoons, trouble in the entrenched coal and mining sectors and sizable losses in the public utilities. The political intransigence across the country has surely not helped.
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