At a time when bank credit growth posted a remarkable recovery, primarily on the back of retail loans, India Inc has painted a not-so-rosy picture with investments. During the October-December quarter, domestic companies announced new projects worth around Rs 1 lakh crore, 53% lower than what was announced in the previous quarter, according to data from the project-tracking database of the Centre for Monitoring Indian Economy (CMIE). That's quite a steep fall.

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The drop in capex announcements was led by a sharp decline in new projects by the private sector. New public sector projects have also reported a tumble. The decline in fresh investments is across the board, barring the construction sector. As per CMIE data, the private sector's stalling rate is hovering near a record high of 24%. The overall stalling rate is lower at 11%, owing to the recent improvement in the implementation of public sector projects. The pile-up of bad loans, policy uncertainties, and the slow progress in unclogging the pipeline of stalled projects have hit capex plans severely.

The government should seek to restore the confidence of companies and step up actions to reinvigorate the investment cycle. The slackness ahead of the general elections and the possible populist measures by the Centre and state governments may act counter-productive. A quick turnaround in the investment scenario is critical for creating more job opportunities.