That investments are plummeting is a not just a data goof-up is clear if the response of as many as 200 companies, including 30 public sector ones, is any indication which points out that their capital expenditure will tumble by 14 percent or by Rs 72,000 crore, this fiscal to a low of 35 percent.

Companies had planned an initial capex of Rs 2.7 trillion this fiscal but a good portion of that will remain only in paper. This southward-ho in the capex will be led by companies in the sectors like cement, textiles, telecom and automobiles, says the Crisil report.

“Investment by private sector companies in our survey is expected to decline by nearly Rs 72,000 crore or 35 percent this fiscal. Since the private sector accounts for three- fourths of GDP and over 90 percent of manufacturing output, revival of the private sector investment is critical to lift the sagging economic growth,” Crisil managing director and chief executive Roopa Kudva said.

A sector-wise capital investment growth in 2012-13 compared to past three year average is a all red marks with cement showing a 75 percent decline, textiles plunging 71 percent, pharmaceuticals declining 51 percent, telecom dipping 35 percent, FMCGs slowing by 34 percent, automobiles dipping by 26 percent, and oil & gas declining by 19 percent.

The only green shoots come from other infra which include airports, ports roads etc which are set to growth 17 percent, IT & ITeS to growth by 25 percent and metals by a higher 31 percent.

The poll was conducted by Crisil among 200 companies, 170 of them private sector ones. At 35 percent capex, the decline in investments by the private sector will be far steeper and lowest in the past four years and comes on top of a 4 percent decline last fiscal.

These 200 companies account for around 70 percent of the market capitalisation of all companies in the S&P CNX 500, excluding banking and financial services companies.

What is more alarming is the fact that, says the survey, close to half of those polled have no intention of investing in new projects this year.

Citing the reasons for this decision, the survey quoting more than 70 percent of the respondents, says policy logjam as the amongst the top two factors responsible for the current slowdown in investments with the other being delays in project clearances.

“At an overall macroeconomic level, the key finding is that capex by corporates is slowing. This slippage in capex comes on the back of a 4 percent fall in capex in 2011-12,” says the report.

The sectors where capex is set to decline massively are cement, textiles, telecom and automobiles, says the survey, adding most of the total planned capex of Rs 2.7 trillion in 2012-13 by polled companies is towards existing ongoing projects with only about one-fourth is towards new projects.

While in some sectors like metals and infrastructure (roads, ports and power) the capex may increase, a large part of it has been already deferred. In fact, 30 private sector companies disclosed that they have deferred or shelved projects aggregating to Rs 35,000 crore, of which infrastructure and metals account for over 70 percent.

“A majority of the companies surveyed have indicated that policy issues such as land acquisition, mining policy, fuel linkages and spectrum pricing as well as delays in project clearances are impacting investments. To spur investments, the government will have to play the role of an enabler by addressing these bottlenecks,” said Crisil Research President Mukesh Agarwal.

This is all the more imperative since the government sector is facing increasing constraints given its widening fiscal deficit as it is yet to come out of the impact of the expansionary fiscal policies initiated during the 2008 crisis.

Of the 200 companies that we polled, about 30 companies, all from the private sector, disclosed that they have deferred or shelved some portion of their originally planned capital investments in the past one year. Of these, 13 have deferred or shelved over half of their originally planned capital investments.

The total capital investments that have been deferred by these 30 companies are estimated at Rs 35,000 crore. Metals and certain infrastructure sectors (roads, ports and power) account for 70 percent of the deferrals.

In automobiles, significant investments already made by most large players coupled with demand slowdown in certain segments are causing a dip in future investments. It is pertinent to mention here that many auto firms have announced large capex for diesel vehicles, but the actual spend is not likely to be large in 2012-13.

In contrast, metals and certain infrastructure sectors (roads, ports and power) will see growth in capex compared to the average for the past three years. However, the polled companies from these sectors are deferring their originally planned capex.

In the infra space, large investment by public sector companies is supporting capex growth though. Moreover, given the long project implementation cycle in these sectors, a large part of the investments is likely to be towards ongoing projects.