Corporate Investment in 1980: A Forecast

An attempt is made in this paper to forecast the growth in private corporate investment in 1980. Corporate investment is taken to include gross capital expenditures of all companies including joint sector companies. This study also provides a picture of the level and composition of corporate investment in 1979. The methodology used in the study 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. Since most of the projects in the corporate sector approach one or the other of the all-India term lending institutions for obtaining financial assistance, the study based on the projects sanctioned by them should be a reliable reflection of the behaviour of the entire sector. Capital expenditures on projects sanctioned by term lending institutions amounted to Rs 1100 crores in 1979. This shows a marginal rise over the level attained in 1978. However, in real terms, there was no rise. Based on the projects sanctioned until the end of 1979, the capital expenditure by the corporate sector in 1980 will be Rs 1038 crores. Taking in to account the expenditures that will be made out of the projects to be sanctioned in 1980 itself and making some adjustments for the phasing of the capital expenditures on the basis of past experiences, it can be concluded that corporate investment in 1980 will in nominal terms rise over the level achieved in 1979 by 8 per cent. But in real terms once again there will be no increase.