NSO signals pvt capex lull in FY26; manufacturing investments may zoom 40%

'Information and communication' are reporting a capex dip to ₹1.09 trillion in FY26 from ₹1.5 trillion in FY25

India’s private sector, after ramping up its capital investment plans to a post-pandemic high of ₹6.56 trillion in 2024-25, is likely to pare its planned outlays for this year by about 25 per cent to nearly ₹4.9 trillion, a first of its kind survey of the private sector’s capex intentions by the National Statistics Office (NSO) revealed on Tuesday.

 

“The slightly lower intended capex for 2025–26, though still above 2023–24 levels, reflects cautious planning after a strong 2024–25. Overall, the trend indicates growing corporate confidence and a judicious approach to investment amid improving economic certainty,” the NSO said in a statement.

 

 

The silver lining is that ‘manufacturing’ players plan to raise their capex to ₹2.11 trillion this year, up 40 per cent over FY25’s ₹1.5 trillion tally and the highest in the survey’s five-year time frame.

 

Among the major segments driving the expected capex dip through 2025-26 is the ‘transportation and storage’ segment that includes activities like land, water, air transport, warehousing and courier services. The capex plans for such players are likely to plummet to ₹23,400 crore this year from ₹1.35 trillion in FY25. 

 

‘Information and communication’, which includes publishing activities, motion picture, video and television programme production, broadcasting and programming activities, are also reporting a capex dip to ₹1.09 trillion in FY26 from ₹1.5 trillion in FY25.

 

In 2025-26, the capex plans in the ‘electricity, gas, steam, air conditioning supply’ segment are expected to rise to ₹16,256 crore from ₹11,856 crore in FY25. The construction sector capex is likely to increase to ₹20,454 crore from ₹9,681 crore last year. However, real estate activity investments are expected to decline sharply from ₹31,927 crore in FY25 to ₹18,251 crore this year.  

 

The ‘Private Sector Capex Investment Intentions Survey’, conducted between November 2024 and January 2025, recorded the actual capex trends of private corporate sector enterprises for the years 2021-22 (FY22), FY23 & FY24, along with the intended investments lined up for FY25 and FY26.

 

Surveyed firms had invested ₹3.94 trillion in FY22, which rose to over ₹5.72 trillion next year, before dropping to ₹4.22 trillion in FY24. In FY25, the intended capex to purchase new assets jumped 55.5 per cent over the previous year to ₹6.56 trillion.  

 

“Capex tends to rise when enterprises pursue growth strategies rather than maintain current operations. Despite challenges like weak demand, geopolitical tensions, and high borrowing costs, about 30 per cent of firms plan to invest in upgradation in 2024–25, supporting the sharp increase in CAPEX for that year,” the NSO said in a statement.

 

While the survey’s sample size was 5,380 firms, it clocked a response rate of 58.3 per cent, with just 2,172 enterprises sharing capex data for the entire five-year period. The survey only covered manufacturing firms with a turnover of or over ₹400 crore, with the cut-off set at ₹300 crore for trade enterprises and ₹100 crore for other players.

 

“Respondents appeared cautious in disclosing capex plans, often pending management approvals. Certain entities, such as Special Purpose Vehicles (SPVs) involved in infrastructure projects, were excluded from the survey frame as they report no turnover despite high capex,” the NSO noted. The next round of the survey is expected to be conducted during October to December 2025.