NEW DELHI: The recovery in Indian economic activity remains tentative and narrowly focused in sectors such as roads, railways, power transmission and passenger vehicles, ratings agency ICRA has said in a report.The report on the Indian economy says the consumption boost from the Seventh Pay Commission award is unlikely to lead to an immediate investment in capacity expansion, as utilisation is still low at 71.5% in first quarter of current fiscal though up marginally from 70.2% in the corresponding quarter last fiscal. The ratings agency also expects the fiscal situation to weigh on project execution. “Availability of budgetary outlays for financing of infrastructure may emerge as a constraint to the pace of execution in FY17.”New project announcements rose 5.9% in the second quarter of FY16 from a year ago. The Rs 3.3 lakh crore new pojects announced in the quarter were concentrated in machinery, electricity, chemical products, transport equipment & services.The review estimates project completion declined by 4.8% on an annual basis to Rs 60,000 crore in Q2FY16 while the value of revived projects was much lower at Rs 10,000 crore.The commodities crash led to more projects getting stalled. “Led by metals & metal products and power projects, a substantial Rs 0.8 trillion worth of projects reportedly stalled in the second quarter of FY16, continuing to outpace value of revived projects,” the report said. The report welcomes the focus on reviving power disitribution companies with 12 states confirming participation in the UDAY Scheme.“However, improvement of the Discoms’ financial health would take place with a lag, which would continue to subdue growth of power offtake,” the report says.The Cabinet Committee on Investment (CCI) has resolved 332 projects by mid-December 2015, unlocking investment of Rs 11.5 lakh crore.Award of contracts for laying city gas distribution network in additional cities is another investment positive. “The recent trend of cancellation and re-awarding of some stalled projects by NHAI is a positive,” it says, pointing out this may increase costs because of higher land acquisition price.The report notes a big kitty of unresolved projects. “However, 372 projects entailing a much larger cost of Rs 18.4 trillion (Rs 18.4 lakh crore) remain unresolved as of mid-December 2015, concentrated in power (32% of value), steel (16% of value) and petroleum & natural gas (18% of value),” the report estimates.