Capex plans resume, Gujarat banks sanction most industrial projects

AHMEDABAD: As industries bounced back after the adverse impact of Covid-19, Gujarat accounted for the highest number of projects being sanctioned by the government in a slew of industrial sectors.

According to data compiled by the Central Bank, 83 new projects worth an estimated Rs 17,000 crore were sanctioned by banks across the state in 2021-22. This is the second-highest number of projects sanctioned over the past decade, the highest being 102 projects in 2016-17.

Stalled expansion and capital expenditure plans have led to an increase in capex plans. This is particularly true for sectors such as specialty chemicals, renewable energy, ceramics, and automobiles, among others, according to bankers.

Capital expenditure (capex) of the private corporate sector plays a significant role in driving the overall investment climate in the economy, according to the RBI.

Industry players attribute the growth in fresh capex to rise in exports and emergence of sunrise sectors.

Chintan Thaker, chairman, Assocham Gujarat State Council, said, "There was a lull for about a year due to Covid-19. However, lot of projects that were on the verge of execution just ahead of Covid-19 but had to be shelved then, are finally taking off. Exports have significantly grown for Indian manufacturers in many sectors, especially since Covid-19 due to the China+1 approach adopted by the US and Europe-based companies. This has called for adding fresh capacities through greenfield and brownfield investments."

"At the same time, emerging sectors such as IT/ ITes, Data, Renewable Energy are also gaining interest of investors. This is further fuelled by a slew of incentives rolled out by both the state and the central governments. As a consequence, Gujarat has once again emerged as a focal point. In addition to big corporates, even MSMEs are making fresh investments in core manufacturing and as ancillaries too," said a city-based industrialist.


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