Even the growth of new investments have significantly declined and slipped to a negative average growth rate of over 43 per cent during the course of past three years, further noted the study prepared by the Assocham Economic Research Bureau (AERB). "New investments in Punjab had reached their peak of over Rs 33,000 crore in 2008-09 and the figure has now fallen to a meagre sum of Rs 4,600 crore."
"Punjab also paints a grim picture in terms of implementation of investment projects as about 70 per cent of projects remained non-starter as of 2013-14 as against about 58 per cent across India," said D.S. Rawat, national secretary general of Assocham while releasing the chamber's study.
"Majority of investment projects that are under implementation (non-starter) in Punjab are in services (39 per cent) and electricity sectors (38 per cent)," said Rawat. "Several departments of the state government play a crucial role in implementation of investment projects as land acquisition, shifting of utilities and others are taken at the state government's level, besides geographical features of the state may also affect the project time and costs."
While the initial cost estimates are arrived at using the current input prices, with delays in implementation the input costs swell thereby increasing the projects' cost, besides it also causes depreciation of assets together with necessitating expenses on repairs or replacements.
Sector-wise, there has been a shift in investment flow in Punjab as the share of services sector has increased to over 40 per cent as of 2013-14 from about 24 per cent in 2004-05, while the share of construction and real estate sector has increased by 12 per cent during the aforesaid period.
While the share of manufacturing sector in the overall investments attracted by Punjab has declined by about 14 per cent, while that in electricity sector has declined by about 13 per cent, highlighted the Assocham study.
Amritsar-Patiala region has emerged on top with over 41 per cent share in total investments followed by Gurudaspur-Rupnagar (20 per cent), Firozpur-Sangrur (20 per cent), while rest of the multiple regions of Punjab account for the remaining 19 per cent of investments.
Punjab?s overall economic growth has decelerated sharply of late as the growth of gross state domestic product (GSDP) from its peak growth rate of over 10 per cent in 2006-07 it came down to half i.e. about five per cent in 2012-13 and the advance estimates of economic growth indicate a moderate year-on-year improvement
Over the years, Punjab's state economy has transformed from an agrarian economy to industrial and services based economy as the services sector contributes over 50 per cent to the GSDP at constant price followed by industry (29 per cent) and agriculture and allied activities (21 per cent), further noted the Assocham study.