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  1. Data drive: Capital formation hits record low

Data drive: Capital formation hits record low

The sharp slowdown in gross fixed capital formation—from 34.3% of nominal GDP in FY12 to 28.5% in FY17—is a reflection of a starker fall in capital formation at the household level, which fell from 15.7% of GDP to 9.1% during the same period.

By: | Published: February 24, 2018 4:18 AM
Data drive, public sector investments, national income, Private sector, corporate investments The revised estimates of national income show that the share of households in gross fixed capital formation has dropped from 45.9% in FY12 to 31.8% in FY17. (PTI)

The sharp slowdown in gross fixed capital formation—from 34.3% of nominal GDP in FY12 to 28.5% in FY17—is a reflection of a starker fall in capital formation at the household level, which fell from 15.7% of GDP to 9.1% during the same period. The revised estimates of national income show that the share of households in gross fixed capital formation has dropped from 45.9% in FY12 to 31.8% in FY17. While public sector investments remain stagnant, corporate investments, too have not picked up. Private sector and households’ capital formation accounts for nearly 75% of the gross fixed capital formation of the country.

 

 

 

The overall investment climate does not appear encouraging. Data on investment intentions as per filing for Industrial Entrepreneurs Memoranda and Letters of Intent show that there were 1,415 new proposals in the first three quarters of the current fiscal as compared with 1,728 in the same period in last financial year.

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