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Domestic Investments

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Domestic Investments

August, 2011

Domestic Investment Scenario in India

Investment is the key element which has taken India on a robust growth trajectory. A significant shift was observed post 1990s in investment strategies and external trade regulations and this has obviously set a definition for the more liberated India. Not only in Asia, but even globally, India is a leading economic power. Many economists believe that India could become among the top two global economic powers in the coming few decades. Earlier, India was considered just as an agriculture based economy, but now India has evolved into a market economy with plenty investment opportunities in different sectors viz. infrastructure, retail, finance and insurance, information technology, telecommunication, and manufacturing. India was ranked the ninth most attractive investment destination in 2009 and is considered as an ideal destination for investments on the back of vibrant democratic setup, presence of a vast network of bank branches, financial institutions, and a well-organized capital market. India has been identified as an important investor in recent years as a result of rapid economic growth in the country and because of availability of abundant financial resources according to World Investment Report 2011.

The Union Budget 2011-12 evidently supports existence of private investments in the Indian economy to take the GDP to 9 per cent in 2011-12. The actions that intend to revive the private investments comprise directions given to institutions like National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI) to provide financial assistance to the micro, small and medium enterprises (MSME), introducing ‘sugam’ to decrease the compliance load on small tax payers who fall within presumptive taxation, releasing small businesses (with turnover of upto US$ 0.132 million) from formalities of audit, further liberalisation of interest subvention on housing loans and creation of ‘India Microfinance Equity Fund’ of US$ 22 million.

Investment Options in India

There are different investment options available in India. However, investing money ultimately depends on how much risk the investor is willing to take. The different investment options in the country include Bank Fixed Deposits (FD), Stock Market, Mutual Funds, National Saving Certificate (NSC), Gold, Real estate, Equity etc.

Investment Initiatives

Raheja group-led retail chain Shoppers Stop plans to invest approximately Rs 400 crore(US$ 88.91 million) to open new stores across formats in India in the next three years.

State-promoted Gujarat Minerals Development Corporation (GMDC) and Gokul Refoils and Solvent Ltd (GRSL) will invest Rs 670 crore (US$ 148.94 million) in setting up a 125 mega watt (MW), lignite-based thermal power plant in Surat district of the State.

The finance ministry has given its approval for six road proposals at an estimated cost of Rs 9773.85 crore(US$ 2.17 billion) under public-private partnership (PPP).

The Government of Kerala and Tata Consultancy Services Ltd have signed a memorandum of understanding for setting up a clutch of facilities in the State, which will involve huge investments.TCS will invest Rs 1,000 crore (US$ 222.26 million) to set up its global training academy at Technocity according to N Chandrasekaran, Chief Executive Officer and Managing Director, TCS.

Bipin Engineers Pvt Ltd, a manufacturer of solar equipment, will set up a new manufacturing facility at Warve, on the Pune-Bangalore highway. The new plant will increase the production capacity of the company to 4,000 solar collectors per month up from the current level of 1,000 collectors per month.

Petronet LNG Ltd, a private company promoted by state-run oil companies, plans to invest US$ 1 billion in setting up a facility to import gas in ships on the east coast, according to Ashok Kumar Balyan, Chief Executive Officer, Petronet LNG.

Fortis Healthcare plans to launch low-cost hospitals in smaller towns under a new brand and has set a target of 25 hospitals in three years.