New Delhi: A Surge in Capital Spending

About 30% of private firms are planning to invest in upgrades during the 2024-25 fiscal year, signaling a robust increase in capital expenditure despite facing hurdles like weak demand, geopolitical tensions, and high borrowing costs. This insight comes from the first-ever survey on private sector capex by the statistics ministry, released on Tuesday.

Cautious Yet Optimistic Planning

The survey indicates a slightly lower intended capex for 2025-26 at Rs 4.9 lakh crore, still surpassing the 2023-24 levels of Rs 4.2 lakh crore. This reflects a cautious approach following a strong 2024-25, where the intended capital expenditure was estimated at Rs 6.6 lakh crore.

Growing Corporate Confidence

"Overall, the trend indicates growing corporate confidence and a judicious approach to investment amid improving economic certainty," stated the inaugural edition of the survey, covering the period from November 2024 to January 2025.

Significant Increase in Aggregate Capex

Out of 3,064 responding enterprises, 2,172 provided complete information for all five years of the reference period, showing a 66.3% increase in aggregate capex from 2021-22 to 2024-25. The average gross fixed asset (GFA) per enterprise in the private sector was estimated at Rs 3,152 crore in 2021-22, rising to Rs 4,183 crore in 2023-24.