Sustained rise in pvt capex is imminent with strong corporates' books: MCA

A sustained increase in private capex is imminent with the strengthening of the balance sheets of Corporates and the consequent increase in credit financing, the Ministry of Corporate Affairs (MCA) said in its latest newsletter.

The November newsletter of MCA noted the increasing number of newly registered companies, the flourishing startup ecosystem, and the rapid emergence of Unicorns all signify the resilience of the Corporate sector.

According to a study published in the RBI Bulletin August 2023 titled “Private Corporate Investment: Performance and Near-term Outlook”, a new private corporate capex cycle is in the offing and private capex spend could reach a decadal high in FY24.

“With the launch of V3 (version 3 of MCA portal), digitalisation has contributed immensely towards this by promoting 'Ease of Doing Business' in terms of making compliance easier through e-forms,” MCA said.

According to government data, private companies account for 95.6 per cent of the total active companies as of November 2023.

The number of active companies in India has increased from 718,592 in 2011 to 1,519,782 in 2023. During the Month of November 2023, Maharashtra had the maximum number of company registrations (2,252) followed by Uttar Pradesh (1,487) and Delhi and Karnataka (1,146) each.

As of November 30, 2023, the number of companies registered under the Companies Act was 25,99,660. Of these, 923,502 companies were closed, 10,462 companies were under liquidation, 23,041 companies are in the process of striking-off from the register and 2,495 companies have so far obtained the “dormant” status.

“Through investments, employment opportunities, and adherence to global best practices, the corporate sector has become an integral force in propelling India towards sustained economic growth and competitiveness on the global stage,” the MCA newsletter said.

MCA said that the capex by the Corporate sector increased to Rs 3.3 trillion in the first half of FY23, driven by heavy investments in diverse sectors of the economy, some of which are a part of the eight core industries.

MCA in its newsletter also highlighted that the positive contribution of the corporate sector in areas like education, healthcare gets reflected by an increase in CSR amount spent by corporates from Rs 10,065 crore in 2014-15 to Rs 25,932 crore in 2021-22, achieving the milestone of crossing the Rs 25,000 crore mark.