Investment intentions drop 61% during Jan

New Delhi: Even as India remains the fastest growing big economy, there are no signs of recovery in the long-ailing manufacturing sector. In January, 109 Part-A filings of industrial entrepreneurial memorandums (IEMs) with investment of Rs10,565 crore were reported, official sources told Bizz Buzz.

In January 2022, there were 86 online filings of IEM Part-A with a total investment of Rs27,390 crore, showing a fall of 61.4 per cent. IEM Part-A filings indicate intentions of industrial investment. Part B filings mean actual investment.

As Bizz Buzz reported earlier, in January, 59 Part-B filings of industrial entrepreneurial memorandums (IEMs) with investment of Rs11,850 crore were reported. In January 2022, there were 64 online filings of IEM Part-B, with a total investment of Rs28,432 crore, showing a fall of 58.3 per cent in the first month of this calendar year on a y-on-y basis.

On the face of it, data on manufacturing looks confusing. On the one hand, we have government statistics, showing a continuous dismal performance. IEM filings, both Part-A and Part-B in 2022, showed decline. On the other hand, we have the Manufacturing Purchasing Managers’ Index, compiled by S&P Global, which showed a rise to 58.7 in May from April’s 57.2. In May, the index was at the 31-month high.

Now, there is a lag of four months between the two datasets. Perhaps, there was a major turnaround in the intervening four months, and the Indian economy is all set for explosive growth in the foreseeable future. This is what Indian policy and decision makers will like to believe, but we will have to wait for some time to confirm this. Another possibility is that the PMI is more focused on the sectors like mobile manufacturing where production-linked incentives or PLIs have done well.