New project announcements in the manufacturing sector have improved significantly to Rs 6.2 lakh crore in FY22, a rise of 93.75 per cent, as against Rs 3.2 lakh crore in FY20, a Bank of Baroda (BoB) study has said.
This was led by improvement in machinery, chemicals and textiles. “Services and the construction sector still seem to be lagging from losses suffered during multiple waves of Covid-19 pandemic, with new project announcements running below their pre-pandemic levels,” the study said.
Sonal Badhan, economist, BoB said, “In FY20, new projects announced in the manufacturing sector had fallen to 17.8%, but rose sharply to 38.3% in FY21 and rose further to 43.5% in FY22. FY22 print is the highest since FY05. This could be the case as the manufacturing sector was less hit by subsequent waves of Covid-19, compared with services sector.”
New projects announced by non-financial companies — which includes manufacturing, mining, electricity, non-financial services, and construction & real estate — had jumped nearly 7 times by FY09 to Rs 26.7 lakh crore from Rs 4.1 lakh crore in FY96, the report said. New projects announced since then have not been able to cross this peak, even though they had reached Rs 23.7 lakh crore by FY16. “Between FY17-FY20, cost of new projects announced had averaged Rs 17.5 lakh crore. New project announcements had fallen to Rs 8.4 lakh crore in FY21 but recovered to Rs 14.3 lakh crore in FY22. However, this print is still below the pre-pandemic (FY20) level of Rs 18 lakh crore and also below FY15/16 levels,” it said.