The government’s consumption boosters like income tax & GST reductions are reflecting in project completion, which is likely to surge in the March quarter, according to CMIE data. However, new project intent must rise substantially for a new investment cycle to materialise, explains Saikat Neogi
l Jump in project completion
Signalling a rising momentum in investments and improved confidence in the industry vis-à-vis the demand scenario, completion of projects that create new capacities will surge in the three months till March this year. Advance data on project completion from the Centre for Monitoring of Indian Economy (CMIE) show that project completion is likely to touch Rs 3.6 lakh crore, the second highest ever since the agency has been tracking the data.
Typically, March-ending quarters report higher completion of projects. In March 2025, projects worth Rs 2.8 lakh crore were completed, higher than the average Rs 2.6 lakh crore commissioned in the preceding four March quarters. To be sure, projected completion peaked in the three months till March 2024, at Rs 4 lakh crore, because of a pre-election rush as completions usually peak just before the announcement of polls. Projects worth Rs 1.8 lakh crore were completed in the preceding December 2025 quarter. And the average completions in the preceding five quarters was Rs 2.1 lakh crore.
l Manufacturing sector takes the lead
In manufacturing, 158 projects worth Rs 1.1 lakh crore are set to be completed in the three months till March this year. This is significant as the sector has averaged about Rs 30,000 crore per quarter in project completion over the last three quarters. While a recovery in March is a seasonal phenomenon, this year’s growth would be higher than the record figures of 2024. In fact, in the last 10 quarters, the share of manufacturing has been 20% of overall project completion by value.
According to advance estimates, in the three months till this March, the share is projected to rise to 30%. The sector’s share in total new investment projects announced in the three months till last December was 34% or Rs 4.3 lakh crore, followed by services (other than financial) at 32% (Rs 4.1 lakh crore). The share of mining has stayed stagnant for several quarters. The share of manufacturing in the total new investment projects announced surged to an all-time high of 67% in the three months till September.
l Services sector projects replicate past trends
Consistent with past trends, the services sector is expected to top completion of investment projects. The advance numbers show that projects worth Rs 1.5 lakh crore in services will be completed in the three months till March this year. Transport services will drive this segment, accounting for Rs 1.3 lakh crore alone spearheaded by railway transport infrastructure at Rs 66,700 crore and road transport infrastructure at Rs 61,900 crore. Transport projects are historically the most susceptible to delays. Of the Rs 1.3 lakh core anticipated, 63 projects worth Rs 42,300 crore are complete and the remaining 144 projects worth Rs 89,100 crore remain in the balance. In the three months till December last year, the share of the services sector in project completion was 52% as compared to 60% in the previous quarter. The share touched an all-time high of 71% in the three months till December 2020.
l Uptick in new projects
Even the value of new investment projects is picking up. In February, the value of new orders reported by companies stood at `63,200 crore, a growth of 19% from the Rs 53,200 crore reported in January. In the three months to December last year, new projects announced grew 14.5% to Rs 12.6 lakh crore from Rs 11 lakh crore in the same quarter in 2024. New projects announced had touched an all-time high of Rs 25.2 lakh crore in the three months till March 2025 on the back of robust private sector projects of Rs 17.1 lakh crore, a year-on-year (y-o-y) growth of 21.9%. Even government projects touched an all-time high of Rs 9.1 lakh crore, a growth of 87.7% y-o-y. Typically, announcement of projects picks up in the three months till March. It slows down in the subsequent two quarters and picks up in the December quarter. The private sector’s share in new investment projects rose steadily for five quarters in a row to touch an all-time high of 91% during July-September (Q2 of FY26), amid a sharp slowdown in government investments.
l Status of capacity utilisation
Capacity utilisation rose marginally to 74.3% in Q2FY26 as compared with 74.1% in Q1FY26, the RBI’s Order Books, Inventories, and Capacity Utilisation Survey shows. However, it is lower than 77.7% reported in Q4FY25 (a 48-quarter high). In fact, capacity utilisation peaked at 83.2% in the fourth quarter of FY11. Corporate India’s inventory-to-sales ratio fell to 61.7% in Q2FY26, a 11-quarter low, indicating strong pick-up in consumption demand. Capacity utilisation across companies is expected to rise and create a more favourable environment for private capex, which has been a key expectation from the government. Private final consumption expenditure grew 8.7% in the 2025 December quarter. Urban spending growth has picked up to a seven-quarter high of 8% in that period, data from a CLSA report show. Strong growth in passenger vehicle sales, rising personal credit, and low inflation boosted the urban sector in October-December.
