RBI sees private capex rising to ₹2.67L crore in FY26
What's the story
The Reserve Bank of India (RBI) has projected a massive 21.5% increase in private sector capital expenditure (capex) for the fiscal year 2025-26. The RBI predicts that this surge will take the total private capex to ₹2.67 lakh crore from ₹2.2 lakh crore last fiscal year. The growth is expected to be driven by strong macroeconomic fundamentals and a possible policy rate cut of 100 basis points (bps).
Financial resilience
Firms' financial health improves amid global uncertainties
RBI highlights that despite global uncertainties, Indian firms are entering the fiscal year with improved financial health. They have healthier balance sheets, higher cash reserves, better profitability, and wider access to diversified funding sources. This improved financial position is creating a favorable environment for private investment in India.
Future prospects
Investment outlook for FY26 remains optimistic
Looking ahead, the investment outlook for FY26 remains cautiously optimistic. RBI acknowledges that external risks such as geopolitical tensions, global uncertainty, and demand slowdown could affect investment sentiment. However, it also notes that domestic fundamentals appear robust. The composition of investments, largely driven by greenfield infrastructure projects, indicates not just cyclical recovery but also structural capacity building in the economy.
Growth translation
Ability to turn intentions into execution crucial
RBI emphasizes that the ability of firms to turn intentions into execution will be crucial in shaping India's growth trajectory. It stresses the need for sustained monitoring of project implementation and supportive policy measures to translate this momentum into durable economic gains.