Large private cos see no growth in FY27 capex: Govt survey, Pg13

Key Highlights:

• Large private sector companies in India project no increase in capital expenditure (capex) for FY27 compared to FY26, according to a MoSPI survey.
• The survey, conducted in late 2025, indicates intended investment of Rs 9.55 lakh crore in FY27, a 16% decrease from the estimated Rs 11.44 lakh crore in FY26.
• While 3,819 enterprises showed a 1.8% increase in intended capex for FY26 from FY25, they do not plan to increase investments in FY27.
• 1,428 manufacturing companies intend to reduce capex by 8% in FY27, down to Rs 2.73 lakh crore.

Detailed Insights:

• The MoSPI survey highlights concerns about the private capex cycle amid global economic uncertainties like US tariffs and geopolitical tensions in West Asia.
• Despite India's high GDP growth rates post-pandemic, economists caution that private investment trends are not showing encouraging signs for sustained economic growth.
• India's real GDP growth is projected at 7.6% in FY26, up from 7.1% in FY25 and 7.2% in FY24, but this growth is not driven by private investment.
• Gross Fixed Capital Formation, a measure of investments, has increased by 9.4%, 8.9%, and 8.7% in current prices over the past three years, largely due to strong public investments.

Key Concepts Involved:

• Capital Expenditure (Capex): Funds used by a company to acquire or upgrade physical assets such as property, buildings, or equipment.
• Gross Fixed Capital Formation: A macroeconomic measure of the value of investments in fixed assets (e.g., buildings, machinery) within a country's economy.
• GDP Growth: The rate at which a nation's Gross Domestic Product (GDP) increases or decreases from one period to another, indicating economic expansion or contraction.