Overview of India's Private Sector Capex Plans
The National Statistics Office (NSO) has released a survey detailing the capital expenditure (capex) intentions of India's private sector for the upcoming years. This survey highlights both the trends and sector-specific forecasts.
Key Findings
- The private sector plans to reduce its capex from a post-pandemic high of ₹6.56 trillion in 2024-25 to approximately ₹4.9 trillion, reflecting a 25% decrease for 2025-26.
- This reduction indicates a cautious but confident approach to investments amidst improving economic conditions.
- The manufacturing sector intends to increase its capex to ₹2.11 trillion, marking a 40% rise from FY25's ₹1.5 trillion.
Sector-Specific Insights
- Transportation and Storage: Planned capex is expected to decrease from ₹1.35 trillion in FY25 to ₹23,400 crore in FY26.
- Information and Communication: Capex is projected to fall to ₹1.09 trillion in FY26 from ₹1.5 trillion in FY25.
- Electricity, Gas, Steam, Air Conditioning Supply: Investments are anticipated to rise to ₹16,256 crore from ₹11,856 crore in FY25.
- Construction: Capex is likely to increase to ₹20,454 crore from last year’s ₹9,681 crore.
- Real Estate: A significant reduction in investments is expected, from ₹31,927 crore in FY25 to ₹18,251 crore this year.
Survey Methodology and Challenges
- The survey, conducted between November 2024 and January 2025, included 5,380 firms, with a 58.3% response rate.
- Firms with turnover thresholds were included: manufacturing (≥ ₹400 crore), trade (≥ ₹300 crore), and others (≥ ₹100 crore).
- Special Purpose Vehicles (SPVs) for infrastructure projects were not part of the survey due to the absence of turnover despite high capex.
Conclusion
Despite challenges such as weak demand, geopolitical tensions, and high borrowing costs, approximately 30% of firms plan to invest in upgrades for growth in 2024–25. The next survey round is scheduled for October to December 2025.