By IANS,
New Delhi : Stringent regulations and procedural constraints have made the port and shipping sector the least attractive for investors, getting less than three percent of the outlay committed by the private sector between January and June, says a new study released by an apex chamber here Wednesday.
Out of Rs.6.33 trillion investment announced by corporates during this period, the ports and shipping sector accounted for just Rs.306.9 billion, or 2.84 percent, said the study by the Associated Chambers of Commerce and Industry (Assocham).
“Despite being a potential sector for investment, ports and shipping sector remained the most neglected sector because of regulations and procedural constraints,” the study added.
Companies such as Essar Shipping, Jindal Saw, JSW Infrastructure and the Shipping Corp of India made these investments.
Another sector that was neglected was construction and manufacturing, which could garner only Rs.367.9 billion (3.5 percent), said Assocham president Sajjan Jindal.
“This lack of interest from investors was because of higher input costs and cost of borrowings,” Jindal said.
Even the information technology sector could manage to attract only Rs.396.54 billion in investment for expansion, upgrade and setting up of IT parks, and software development and delivery centres over the next two to 10 years.
“The IT sector has not been that great centre for investment because it is still reeling under global slowdown and will continue to be so,” Jindal added.
Similarly, automobile accounted for 4.33 percent of total investments announced.
The sectors that remained attractive for the investors include power (18.64 percent), real estate (14.38 percent), steel (10.33 percent), retail (8.49 percent), telecom (8.48 percent) and oil and gas (8.45 percent).
The power sector attracted the maximum investments – Rs.1.96 trillion.
The realty sector ranked second in terms of the flow of funds, with commitments worth Rs.1.51 trillion over the next two-five years from companies such as Omaxe, Uppal Group and Mahindra World City.
The steel sector attracted investments of over Rs.1 trillion from steel majors such as Vedanta Resources, Tata Steel, Bushan Steel and JSW Steel.
The retail sector, growing at an estimated 25 percent, attracted investment of Rs.892 billion for the period January-June 2008.