Private Sector Capital Expenditure (Capex) Trends

The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) released a survey on private sector capex intentions for the financial years 2024-25 and 2025-26.

Key Findings of the Survey

• The intended capex for 2024-25 saw a significant increase of 55.5% year-on-year, reaching Rs 6.56 lakh crore.
• For 2025-26, a 25.5% decline in capex intentions to Rs 4.89 lakh crore is projected.
• Despite challenges such as weak demand, geopolitical tensions, and high borrowing costs, about 30% of firms planned investments in upgradation in 2024-25.
• The capex trend indicates cautious planning following a robust 2024-25, with intentions still above 2023-24 and 2021-22 levels.
• Aggregate capex increased by 66.3% from 2021-22 to 2024-25.

Survey Methodology

• The survey was conducted from November 2024 to January 2025 with a sample size of 5,380 enterprises.
• A total of 2,172 enterprises provided complete data for the reference period, reflecting a 23.9% rise in aggregate capex from 2021-22 to 2025-26.

Sector-wise Capex Distribution

• Manufacturing enterprises accounted for the largest share at 43.8% of intended capex.
• Information and Communication Activities and Transportation and Storage Activities followed with shares of 15.6% and 14%, respectively.
• Around 49.6% of the capex was for income generation, 30.1% for upgradation, and 2.8% for diversification.

Use of Capex

• 53.1% of the capex in 2024-25 was dedicated to purchasing machinery and equipment.
• 22% was allocated for 'capital work in progress' and 9.7% for 'dwellings and other structures'.

Gross Fixed Asset (GFA) Trends

• The average GFA per enterprise was Rs 3,151.9 crore in 2021-22, rising to Rs 3,279.4 crore in 2022-23, and further to Rs 4,183.3 crore in 2023-24.
• The Electricity, Gas, Steam, and Air Conditioning Supply sector had the highest GFA, exceeding Rs 14,000 crore per enterprise.

Outlook for 2025-26

• Out of 3,064 responding enterprises, 2,172 reported their capex intentions for 2025-26.
• The data suggests a cautious approach in declaring capital expenditure plans, requiring careful interpretation.

This summary reflects the growing corporate confidence and a judicious investment approach amid improving economic certainty.