While the Government of India has implemented a multi-pronged strategy, including aggressive public capital expenditure (capex) outlays in infrastructure, targeted production-linked incentive (PLI) schemes, and FDI liberalisation with new free trade agreements (FTAs), over the last few years to catalyse private sector investments, private capex in India has been languid after capex per enterprise peaked at ₹260 crore in FY23.
Brokerage firm Systematix Shares and Stocks (India), in its report on 15 October, highlighted the findings of capex surveys of the National Statistics Office (NSO), which showed capex per enterprise peaked at ₹260 crore in FY23 before falling to ₹160 crore in FY26, with intended FY27 spending showing no improvement.
Moreover, the conversion of intended capex into actual spending has weakened significantly, with the realisation ratio (RR) declining from 112% in FY23 to 96% in FY25, suggesting FY26-FY27 investments may undershoot current plans.
The provisional capex for FY26 and the intended capex for FY27 stand at ₹160 crore each, significantly lower than the actuals in FY23-FY24.
As per Systematix report, the survey showed capex in the manufacturing sector declined from ₹220 crore in FY22 and FY23 to ₹210 crore in FY24 and ₹170 crore in FY25, before recovering to ₹210 crore in FY26. The intended capex per enterprise for manufacturing in FY27 stands at ₹190 crore.