New investment plans experienced a nearly 50% reduction between October and December 2023 compared to the previous quarter. Public capital expenditure projects decreased at a quicker rate, almost 60%, while proposed private sector expenditures declined by 35%.

This downturn marked the third consecutive quarter of sequential decline in new investment projects, following a record high in the fourth quarter (Q4) of 2022-23, as reported by data from investment tracking firm Projects Today.

Proposed investments saw a 50% reduction across all sectors except electricity. The most significant drops were observed in irrigation (down by 75%) and manufacturing (61.5% lower).

The reduction in manufacturing investment plans can be attributed to consecutive quarter-on-quarter declines of 77.6% and 2.3% in the initial two quarters of 2023-24. This decline was most significant in crucial sectors such as automobiles (-63.8%), steel (-74.8%), and cement (-89%).

In the second quarter of this year, manufacturing projects constituted approximately 30% of the Rs 7.05-lakh crore in new investments announced. However, in the third quarter, they accounted for only 21%, amounting to around Rs 80,000 crore out of the Rs 3.83-lakh crore total investments planned. Overall, investment plans experienced a 45.7% quarter-on-quarter decrease.