New Delhi [India]May 3 (ANI): Private capital expenditure in India remained weak in the fourth quarter of the financial year 2024-25 (Q4FY25), according to a report by Avendus Spark recently.
Despite the overall increase in the new project announcements, the private sector was suppressing the contribution of the private sector due to many economic and geopolitical factors.
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The report said that the total new project announcements in both public and private sectors increased by about 22.7 percent year-on-year. 18 trillion in Q4Fy25. However, within it, the announcements of the private sector project saw only 4 percent of the yoy growth.
It said, “Private capex Q4Fy25 remains sluggish. Uncertainty, private capex announcements have declined significantly.”
Power and renewable energy sector saw an increase of 55 percent in private announcements, on the other hand, new project announcements in major areas such as manufacturing and services saw a decline in new project announcements.
The announcements of the manufacturing project declined by 5 percent, while the service sector saw a sharp decline of 18 percent.
Within manufacturing, however, some segments such as textiles, food and agriculture, diverse manufacturing, metal and transport equipment reported significant growth.
For full financial year FY25, private project announced from 9 percent YOY to Rs. 27 trillion. This decline was mainly due to services and weak activity in construction/real estate areas.
The report attributed this trend to reduce domestic consumer demand and increase global macroeconomic uncertainty.
Additionally, concerns over Trump-era’s tariffs and an increase in imports from China have disrupted global trade and affected the investor’s spirit. These factors have alerted private firms, causing delays or downsizing in the capex schemes.
In Q4Fy25, private project perfection also declined rapidly. Full private projects value 41 percent to YOY. 965 billion. Sector-wise, manufacturing declined by 30 percent, services 70 percent and construction and real estate declined by 89 percent.
For the entire FY25, private project perfection is Rs 31 percent from YOY. From 2.5 trillion rupees. 3.6 trillion in FY24.
However, some bright spots remained. 55 percent of YOY in electricity sector investment. 5.6 trillion in Q4Fy25, while mining is Rs 732 percent from YOY. Only Rs. 3 billion a year ago.
Overall, the report showed that while some sectors are showing flexibility, private capital expenditure in India continues to face significant headwinds. (AI)
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