24 April 24, 2002 – Outstanding investments in the Indian power sector shrunk by 2 per cent in 2001-02 due to problems faced by state electricity boards and financial institutions’ decision to withhold sanctioned loans for various
projects, according to Economic Research India’s survey.
Project proposals by Indian and foreign promoters were withdrawn and in all 23 power projects worth Rs 509bn ($10.56 bn) were shelved during last fiscal, ERI said in its quarterly survey of project investments.
The contraction in the power sector investments was due to inability of State Electricity Boards to provide proper payment cover and Financial Investors decision to withhold sanctioned loans, it said.
Except for the pharmaceuticals, consumer electronics and textiles sector, the outstanding projects investment in manufacturing sector also contracted by 4 per cent. However, various central government initiatives saw a sharp rise in proposals in power distribution, roadways, oil & gas pipelines and hotels, it added.