The projected private capital expenditure (capex) for FY26 shows a notable decrease compared to FY25 figures, with potential further reductions due to US tariff impacts, according to a State Bank of India (SBI) analysis.The analysis, cited by ANI, emphasises that while government expenditure has propelled growth, there is an urgent requirement for private sector engagement to maintain economic momentum.“Data…….. indicated that the intended capex for FY26 is significantly lower than the FY25 numbers,” it said. The analysis indicates that private investors must “hold the baton now” as subdued private investment continues to pose challenges for sustainable growth.SBI’s findings, based on an April 2025 survey encompassing 2,170 enterprises across various sectors including agriculture, manufacturing and IT, reveal that FY26 intended capex falls short of FY25 levels, with additional risks from global trade challenges.The analysis revealed private capex figures of Rs 3.9 lakh crore in 2021-22, increasing to Rs 5.7 lakh crore in 2022-23, followed by a reduction to Rs 4.2 lakh crore in 2023-24. Recent years show private capex fluctuating between Rs 4.9-6.6 lakh crore.FY26’s projected investment of Rs 6.6 lakh crore appears insufficient when considering the requirements for enhanced economic growth.The document noted that despite government capital expenditure boosting the economy, private investment has not provided corresponding support.Government capex to GDP elasticity peaks at 1.17, indicating public expenditure’s positive impact on economic activity. However, limited private investment restricts the multiplicative effects of government initiatives.“The somehow somber elasticity at 1.17 implies in the Indian context that government capital expenditure has been able to lift the economy to a higher trend. However, the muted presence of private investment is a clear constraint to push the multiplier to ever higher levels,” the analysis further stated.
