The central bank on Tuesday said that the corporate investment in 2011-12 will be lower than the previous year because of escalating cost of capital and rising input costs. According to Reserve Bank of India (RBI) estimates, capital expenditure incurred by corporates in 2010-11 is about R3,82,641 crore.
?Going by the assessment on date, the capital expenditure of the above order (2010-11) does not appear to be feasible,? said RBI in the September 2011 monthly bulletin. The capital expenditure already planned for 2011-12 is about R2,74,919 crore and if companies do not defer the investment decisions and adhere to their investment plan, this pipeline investment is expected to provide the momentum of investment in 2011-12, the bulletin noted.
If the aggregate capex in 2011-12 were to match previous year’s, about R1,07,722 crore needs to show up from the new investment intentions of 2011-12 by the private corporate sector, it added.