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Private sector capex lowest since FY 2008: Report

The share of private investments in the infrastructure sector has fallen to a decadal low of around 25 per cent in FY18, sharply down from a high of 37 per cent in FY08, according to a Crisil Infrastructure Advisory report released on Friday. Private investments, which averaged 37 per cent between fiscals 2008 and 2013, fell by 600 basis points (bps) between fiscals 2013 and 2017 to 31 per cent, which fell a steep 600 bps further to 25 per cent in FY18, as a plethora of stalled projects and stressed assets dampened investor interest and risk appetite.

“A material ramp-up in government spending in the past few years has meant the share of private investments in infrastructure has fallen to a decadal low of around 25 per cent in FY18,” the Crisil report said. This means that between fiscals 2008 and 2018, there was a massive plunge of 1,200 bps in private investments.

While the highways sector has seen a revival in public private partnerships (PPPs), and the renewables sector some buoyancy, private investments in other infrastructure segments have remained stagnant or weak, the report said. “Resumption and broad-basing of private investments are critical to sustain the share of infrastructure investments at around 6 per cent of GDP (gross domestic product) over a medium-to-long-term,” Crisil managing director Ashu Suyash said in the report.

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