ndia’s private corporate investment is expected to increase by 54% to ₹2,45,212 crore in 2024-25, up from ₹1,59,221 crore in 2023-24, according to a recent study by the Reserve Bank of India (RBI). The projection is based on the phasing profile of pipeline project finances.
The study indicates that aggregate capital expenditure (capex) planned by the private corporate sector for 2023-24 saw a substantial rise of approximately 57% compared to the previous year. This surge reflects strong investment intentions, driven by a significant increase in both the number of projects and the total cost of projects sanctioned by banks and financial institutions. Notably, greenfield projects accounted for around 89% of the total project costs financed.
The infrastructure sector continues to be a major focus of this investment, with 'Roads & Bridges' and 'Power' sectors attracting the largest shares of capital.
The study highlights the crucial role of private corporate sector investment in shaping the overall investment climate in the Indian economy. It uses data on the phasing plans of capex to assess the investment intentions of private corporates and provide a near-term outlook.
The RBI’s monthly ‘State of the Economy’ bulletin notes that aggregate demand conditions in India are gaining momentum, supported by a revival in rural consumption driven by rising incomes. This boost in demand is expected to reinvigorate the previously subdued participation of the private sector in overall investment, thereby stimulating economic growth.
The report also observes that rural consumption spending, underpinned by increasing incomes, is beginning to drive volume growth in fast-moving consumer goods (FMCG). This trend is a sign of strengthening fundamentals, with utility penetration – such as LPG, electricity, and two-wheelers – leading to additional consumer spending in newly adopted categories like toilet and floor cleaners, bottled soft drinks, and insecticides.
Rural savings are also on the rise, as evidenced by the growing number and value of savings bank accounts.
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