The marginal pick-up in investments in the Indian economy from 34.5% of the GDP in 2008-09 to 36.5% in 2009-10, though significant in the context of a sluggish global recovery, is still far below the trends, given that Indian investment touched 38.1% in 2007-08. But the decline and recovery has differed widely across the major sectors of the economy.
Though investment in manufacturing has recovered marginally, by 1.7 percentage points to 10.5% of GDP in 2009-10, it still remains far below the 13.8% achieved in 2007-08. In the case of construction, the 2% rate achieved in 2009-10 was marginally below the 2.6% peak achieved earlier. For the community, social and personal services segment, the 5.3% level was 0.2 percentage points below the pre-recession period.
In some sectors the slowdown had only a lagged impact on investments. In agriculture, electricity, transport, storage & communications, trade, hotels & restaurants and financing, insurance, real estate & business services, the investment rate picked up in 2008-09, when the overall investments decelerated, but decelerated in 2009-10 when the overall investments in the economy recovered marginally.
Among sub-sectors where investments have registered the sharpest deceleration was trade, where investments declined probably due to the slowdown in growth of organised trade, transport other than railways, banking and real estate.