RIL projects lift industrial investments to record high

24 March 2020

Reliance Industries’ one and a half dozen chemical manufacturing projects in Vadodara in December contributed to a seven-fold increase in industrial projects in the country. This is in terms of value in 2019 year-on-year, data by the department for the promotion of industry and internal trade (DPIIT) showed. 

Industrial projects worth Rs 17.9 trillion were shown by DPIIT in 2019 as having been implemented, up from Rs 2.5 trillion in 2018, and Rs 71,396 crore in 2017, the data showed.

This is in sharp contrast to the National Statistical Office’s (NSO) projection of a 0.6% decline in the gross fixed capital formation (GFCF) in 2019-20.

Experts pointed out that the DPIIT data is unlikely to reflect in the national accounts number in its entirety as it only captures balance sheet data. Some companies spread investments over several years or by carrying out trial productions for years.

The number of projects that were shown as having commenced production stood at 1,229 in 2019 against 1,005 in 2018 and 571 in 2017.

At odds with the economic gloom and uncertainty, investment proposals or intentions also touched an 8-year high in 2019. Investment proposals worth Rs 6.79 trillion were recorded in 2019, up 46% from 2018.

In DPIIT data, the chemicals sector contributed about 82% to the industrial investments at Rs 14.7 trillion, suggesting that the jump was essentially on the back of the Reliance Industries’ projects. It commenced the production of chemicals like low-intensity polyethylene, acrylic fibre, polyvinyl chloride, and paraxylene.

Gujarat accounted for 84% of total projects in value terms at Rs 15.1 trillion in 2019, against just Rs 31,819 crore in 2018.