Even as the threat of Omicron looms large, project completions by India Inc. hit a six-quarter high of ₹1.45 lakh crore in the December quarter of FY22 against the previous high of ₹1.71 lakh crore seen in the March 2020 quarter, when the pandemic broke out.

What’s pertinent to note is that the project completions have a strong political undertone. According to Mahesh Vyas, managing director and CEO of CMIE, the pick-up in completion was also partly influenced by political activism, especially in the highways segment. Uttar Pradesh, which will see elections early this year, accounted for over 36% of the total projects. This is by far the largest share of the state in project completions in a quarter since it, usually, accounts for less than 10% of total project completions.

The 341-km, ₹22,500-crore Purvanchal Expressway in Uttar Pradesh, inaugurated by Prime Minister Narendra Modi in November 2021, accounted for a lion’s share in terms of value. The second-biggest highway project, again in UP, was the 257-km, ₹9,800-crore Sarayu Nahar project, inaugurated by the PM in December. Besides these two highway projects, the PM had also inaugurated the ₹8,600-crore, 1.27-million-tonne FCI’s urea plant at Gorakhpur, and the ₹2,600-crore Arjun Sahayak irrigation project. The project is expected to provide irrigation facilities to over 1.5 lakh farmers across 168 villages of Banda, Mahoba and Hamirpur in the state.

Cumulatively, the four projects add up to ₹43,500 crore of the projects completed during the quarter. Given that elections are due to be held in February-March this year and the state is a stronghold of the ruling party, the focus is not without reason. According to Vyas, the PM does not normally inaugurate so many projects in a state and, hence, the rush should be seen in light of the elections due in the state.

Following the lockdown, project implementation got hit only to recover in the March 2021 quarter to ₹1.17 lakh crore. But the second wave again impacted execution before recovering in Q3 of the current fiscal.

According to CMIE, project completions were severely impacted during the quarters of June, September and December 2020, averaging at ₹0.67 lakh crore compared with an average of ₹1.4 lakh crore over the preceding three quarters. For the current fiscal, the average quarterly run rate was over ₹1.11 lakh crore.

Project completions improved from the quarter ended March 2021 when they clocked ₹1.17 lakh crore. Completions dipped to ₹0.74 lakh crore in the quarter of June 2021 before bouncing back to ₹1.15 lakh crore and ₹1.45 lakh crore in the next two quarters. The average completion of projects per quarter during calendar year 2021 works out to ₹1.12 lakh crore. The December quarter number could be higher as expected revisions to the first estimate could get revised to around ₹2 lakh crore. That would be significant considering that since 2014 only four of 32 quarters have crossed the ₹2-lakh-crore mark.

Purvanchal Expressway

UP polls spur project completions to 6-qtr high of ₹1.45 lakh cr