Intended capital expenditure of the private corporate sector is estimated to decline by about 25 per cent to Rs 4.88 lakh crore in 2025-26 from Rs 6.56 lakh crore in FY25, said a government survey report released on Tuesday.
According to the Forward-Looking Survey on Private Sector CAPEX Investment Intentions between November 2024 and January 2025, conducted by the Ministry of Statistics & Programme Implementation, the actual capex in the private corporate sector was Rs 3.94 lakh crore in 2021-22, Rs 5.72 lakh crore in 2022-23 and Rs 4.22 lakh crore in 2023-24.
A total of 2,172 enterprises submitted complete information for all five years of the reference period, forming a fixed panel.
The aggregated (unweighted) capex data from this panel of enterprises serves as a reliable basis for analysing capital expenditure trends over the five-year period, the ministry said.
The results show an overall increase of 66.3 per cent in aggregate capex (unweighted) over the four-year period from 2021-22 to 2024-25.
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Out of the 3,064 responding enterprises, 2,172 reported their capex intentions for 2025-26.
The data indicates a cautious approach by respondents in declaring their capital expenditure plans.
Therefore, the report said the Capex data for 2025-26 should be interpreted with caution, considering the conservative approach and apprehension shown by the responding enterprises in reporting these figures.
However, the results show an overall increase of 23.9 per cent in aggregate capex (unweighted) from 2021-22 to 2025-26 for this fixed panel of 2,172 enterprises, the data showed.
The average gross fixed asset (GFA) per enterprise in the private corporate sector was estimated at Rs 3,151.9 crore in 202122.
It increased by 4 per cent to Rs 3,279.4 crore in 202223 and further grew by 27.5 per cent to reach Rs 4,183.3 crore in 202324.
The highest GFA per enterprise, exceeding Rs 14,000 crore, was observed in the industry category of 'Electricity, Gas, Steam, and Air Conditioning Supply', followed by 'Manufacturing' enterprises (Rs 7,000 crore to Rs 10,000 crore), the report said.
Enterprises principally engaged in manufacturing activities accounted for more than 65 per cent of the total gross fixed assets in the private corporate sector over the past three years from 2021-22 to 2023-24, followed by enterprises engaged in 'Electricity, Gas, Steam, and Air Conditioning Supply' (8 per cent-10 per cent).
In 202122, the estimated actual capex per enterprise was Rs 109.3 crore compared to the proposed value of Rs 102.7 crore, resulting in a realisation ratio of 106.41 per cent.
A similar trend was observed in 202223, where the estimated value of actual capex per enterprise reached Rs 148.8 crore against a proposed value of Rs 133.3 crore, yielding a realisation ratio exceeding 100 per cent, it stated.
For 202324, the realisation ratio stands at 99.7 per cent, with the estimated actual capex per enterprise at Rs 107.6 crore and the proposed capex at Rs 107.9 crore.
The estimated provisional capital expenditure per enterprise for acquiring new assets in 202425 stands at Rs 172.2 crore.
Among the sectors, manufacturing enterprises account for the largest share at 43.8 per cent, followed by those in 'Information and Communication Activities' (15.6 per cent) and 'Transportation and Storage Activities' (14 per cent).
The estimated provisional capital expenditure per enterprise for acquiring new assets in 202425 stands at Rs 172.2 crore.
Out of the total capital expenditure provisionally incurred in the year 2024-25, nearly 53.1 per cent were utilised for purchasing machinery and equipment.
According to survey estimates, nearly 40.3 per cent of enterprises plan to undertake capex on core assets during 202425.
Additionally, 28.4 per cent intend to invest in value addition to existing assets, while around 11.5 per cent focus on opportunistic assets, and 2.7 per cent on debt strategies.
The strategy of investing in distressed assets and non-performing loans was adopted by less than one-half of a per cent of enterprises. Meanwhile, about 16.9 per cent allocated their capex towards other diverse investment strategies.
The survey estimates indicate that nearly 49.6 per cent of private corporate sector enterprises undertook capex in 2024-25 primarily for income generation.
An additional 30.1 per cent directed their investments toward upgradation, while around 2.8 per cent focused on diversification.
The remaining 17.5 per cent of enterprises reported using their capex for other reasons, it stated.
The sample size for the survey was 5,380 enterprises: 4,145 enterprises in the Census sector and 1,235 enterprises in the sample sector.
In 202223, the Parliamentary Standing Committee recommended that the Ministry of Statistics and Programme Implementation (MoSPI) develop a comprehensive methodology to capture capital expenditure (capex) data from the private sector.
Survey instruments designed to capture data on past investments projected capex for the next two years, and the breakdown of investments by asset type were developed in alignment with the specifications of the Department of Economic Affairs.
Responding to this recommendation, the National Statistical Office (NSO) conducted the inaugural Forward-Looking Survey on Private Sector CAPEX Investment Intentions between November 2024 and January 2025.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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