India's private corporate investment to surge 54% in 2024-25: RBI report

An RBI study has found that India’s private corporate investment is estimated to surge by 54 percent to Rs 2,45,212 crore  in 2024-25 from Rs  1,59,221 crore last year. The study also indicates that aggregate capital expenditure (capex) intended by the private corporate sector in 2023–24 increased significantly by about 57 percent over the preceding year. The investment intentions of private corporations remained buoyant during 2023–24, as reflected in the higher total number of projects as well as the total cost of projects sanctioned by banks and financial institutions, with green field projects accounting for the lion’s share of about 89 percent in the total cost of projects financed. RBI’s monthly State of the Economy bulletin also states that in India, aggregate demand conditions are gathering momentum with a revival in rural consumption on the back of growing incomes. This stimulus to demand is expected to reinvigorate the hitherto subdued participation of the private sector in total investment, which will spur growth.
The infrastructure sector continued to attract a major share of envisaged capital investment, led by ‘Roads & Bridges’ and ‘Power’ sectors, according to the study.The RBI’s monthly ‘State of the economy’ bulletin also states that in India, aggregate demand conditions are gathering momentum with a revival in rural consumption on the back of growing incomes.This stimulus to demand is expected to reinvigorate the hitherto subdued participation of the private sector in total investment, which will spur growth.Utility penetration – LPG; electricity; two-wheelers – is bringing with it additional spends alongside newly adopted categories, including toilet and floor cleaners, bottled soft drinks and insecticide. Rural saving is also on the rise as evident in the rising number and outstandi

(Writer is a Finance Research Analyst, based in Gandhinagar, Gujarat)