Corporate Investment in 1979: A Forecast

An attempt is made in this paper to forecast the behaviour of private corporate investment in 1979. Corporate investment is taken to include gross capital expenditures of all companies including joint sector companies. Government companies alone are excluded. This study also provides a picture of investment behaviour in 1978. The methodology applied in this paper to forecast corporate investment relies on the data available with the term lending institutions on the phasing of capital expenditures of projects sanctioned by them. These may be regarded as a kind of anticipatory data for forecasting. This study shows that investment in the Private Corporate sector in 1978 rose by six per cent over the level attained in 1977. However, the present indications are that corporate investment in 1979 may not exceed the level achieved in 1978. Capital expenditures in 1978 on all the projects sanctioned by these institutions in the current and previous years will amount to Rs 1014 crores as compared with Rs 955 crores in the previous year. This implies a growth of six per cent. As of now, based on the projects sanctioned until the end of 1978, the capital expenditures in 1979 will be Rs 745 crores. Even if the expenditures likely to be incurred on projects to be sanctioned in 1979 are added, the total capital expenditures in the corporate sector in 1979 are not likely to rise above the level reached in 1978.