30% Firms Planned To Invest In Upgradation In FY25 Despite Headwinds: Centre's Capex Survey

Despite challenges like weak demand, geopolitical tensions, and high borrowing costs, about 30% of private firms planned to invest in upgradation in financial year 2024–25, supporting the sharp increase in capex for that year, according to National Statistical Office's inaugural forward-looking survey on private sector's capital expenditure.

The survey was conducted between November 2024 and January 2025. It projects the private sector's intended capex in fiscal 2026 at Rs 4.88 lakh crore. This, it pointed out, is lower than the intended capex of Rs 6.56 lakh crore in fiscal 2025.

Overall, the capex trend indicates growing corporate confidence and a judicious approach to investment amid improving economic certainty, it added.

Key findings from the Centre's inaugural capex survey:

• The average gross fixed assets per enterprise in the private corporate sector increased from Rs 3,151.9 crore in 2021–22 to Rs 3,279.4 crore in 2022–23, growing by 4%, and further to Rs 4,183.3 crore in 2023–24, reflecting a significant 27.5% growth.

• The estimated capex per enterprise for the years 2021–22, 2022–23, and 2023–24 was Rs 109.2 crore, Rs 148.8 crore and Rs 107.6 crore respectively.

• The estimated provisional capital expenditure per enterprise for purchasing new assets in 2024–25 was Rs 172.2 crore.

• Overall increase of 66.3% in unweighted aggregate capex over the four-year period from 2021- 22 to 2024-25.

• The strategy of 40.3% of enterprises is to undertake capex on core assets during 2024–25, followed by 28.4% to invest in value addition to existing assets.

(This is a developing story)