Pvt capex to grow Rs1 lakh cr in 2 yrs, little focus on long-term projects

Estimate based on moderate consumption demand, global overcapacity and the working capital disruptions owing to GST

Private capital expenditure (capex) will grow by Rs 1 lakh crore till FY20, ratings agency India Ratings and Research (Ind-Ra) has said in a report.

This increase will be largely in the form of maintenance and essential upgrades by non-stressed companies. Capex recovery will revive after FY20. This estimate is based on moderate consumption demand, global overcapacity, and working capital disruptions owing to the goods and services tax (GST), and considers a compound annual growth rate (CAGR) of five-eight per cent. 

The report states that companies are likely to show unwillingness to invest in long-term projects due to muted demand and significant