Private Sector's Capex Decline Forecast Revealed

A government survey forecasts a 16.5% decline in the private sector's capital expenditure on new assets for 2026-27, estimating it at Rs 9.55 lakh crore. The Ministry of Statistics & Programme Implementation's survey previously estimated provisional capex for 2025-26 at Rs 11.43 lakh crore. Analysis shows focus on core and value-added investments, with internal accruals being the main financing source.

A recent government survey projects a 16.5% drop in private sector capital expenditure on new assets, expected to reduce to Rs 9.55 lakh crore in the fiscal year 2026-27. Conducted by the Ministry of Statistics & Programme Implementation, the study provides a comprehensive assessment of future investment trends.

The survey, which involved 5,366 operational enterprises, forecasts that enterprises will focus primarily on core and value-added investments. Approximately 48.63% prioritize core asset investments, while 38.36% target enhancements. The survey also examines sources of capital, revealing that internal accruals fund 65.35% of investments.

Additional survey findings indicate domestic debt constitutes 23.25% of capex financing, followed by equity and external sources such as FDI. This data underscores the cautious investment strategies adopted by firms amid these economic circumstances.

(With inputs from agencies.)