New projects down 46% in September quarter, value falls to ₹5.2 tn

New project announcements nearly halved year-on-year during the three months ended September 2025, with their value falling 46 per cent to ₹5.2 trillion, according to the data from project tracker Centre for Monitoring Indian Economy (CMIE).

The projects of the central and state governments fell more than those from the private sector amid the global spike in uncertainty. 

The value of new projects of governments (central and state) fell 83 per cent year-on-year to just over ₹60,000 crore in July-September, according to the CMIE data. 

It was ₹3.6 trillion during the same period last year. Government announcements were the lowest in data going back 60 quarters. 

 

The private sector announced new projects worth ₹4.6 trillion in September 2025, marking a 24 per cent year-on-year decline.

Project announcements in manufacturing have been relatively good with a decline of less than 4 per cent to ₹3.8 trillion. Among other key sectors, electricity projects were down nearly 90 per cent year-on-year to ₹22,000 crore. 

Non-financial services, construction, and real estate, as well as irrigation projects, all saw a year-on-year decline in excess of 60 per cent. 

Interestingly, the decline in governments’ new project numbers comes amid a rise in capital spending by the Union government between April and August. The CMIE numbers cover  projects of the central and state governments.

  State governments are said to be facing uncertainty though the central data shows signs of investment. 

“… Capital spending increased by a massive 113 per cent in August 2025 after declining 5.3 per cent in July 2025. Notably, capital spending, excluding loans and advances, grew 59 per cent in August 2025,” said an October 1 EcoScope report from Motilal Oswal Financial Services.

 

Capital expenditure by the central government was higher in the first five months of the year than in the previous year, noted the Motilal Oswal report.

 

A combination of heightened global uncertainties and changes in taxation may have a role to play, according to Sachchidanand Shukla, group chief economist, Larsen and Toubro.

 

The cut in goods and services tax (GST) may be creating a need for recalibration for certain state governments on revenue visibility. Tariff uncertainty has had an impact on the private sector, which is seen in the decline in new private initiatives.

 

A lot of government expenditure often comes in the last quarter of the year. This will likely play out this year as well, driven largely by the Centre.

 

A back-ended central-government-led push could help buoy up the investment numbers for the year, according to Shukla.

 

“It should see some upward momentum,” he said.

 

The government sought to reduce GST, effective from this year. This tax is shared with state governments, which will be affected by the cuts.  

 

While new projects are on the backburner, project completion is up 17.6 per cent. This has been driven largely by government completions, which were up 34 per cent year-on-year, even as the private-sector numbers declined (chart 2).

 

Seasonally adjusted capacity utilisation for Indian manufacturers was 75.8 per cent, according to the latest June quarter numbers from the Reserve Bank of India’s “Order Books, Inventories, and Capacity Utilisation Survey” (OBICUS).

 

Project announcements in manufacturing have been relatively good with a decline of less than 4 per cent to ₹3.8 trillion. Among other key sectors, electricity projects were down nearly 90 per cent year-on-year to ₹22,000 crore.

 

Non-financial services, construction, and real estate, as well as irrigation projects, all saw a year-on-year decline in excess of 60 per cent.