Indian economy suffered a declined of nearly fifty per cent in new investments in the fiscal year of 2012, a new report by the Reserve Bank of India (RBI) revealed.

Envisaged total fixed investment in new projects dropped by a whopping 46 per cent from Rs 3.9 lakh crore in 2011 to nearly Rs 2.1 lakh crore, while envisaged investment in infrastructure slipped by 52 per cent from Rs 2.2 lakh crore in 2011 to Rs 1 lakh crore in the fiscal year of 2012.

New investment in the sector of telecommunications almost dried up, while new investments in roads, ports and airports decelerated sharply.

The report expressed doubts on the government's stated plan to invest $1 trillion in the infra space during the current plan period.

Expressing doubts on the government's investment plan, the report said, "The projected investment of $1 trillion in the 12th Plan presents a formidable challenge in view of limited fiscal space available in the public sector."

The RBI noted the lack of private sector's participation in certain important sectors, such as railways, irrigation, power distribution, water supply, sanitation and ports, is one of the reasons for the decline investment.

The central bank also stressed that there is a strong need to create conducive, transparent and credible environment for private sector participation in key sectors.