The Ministry of Statistics and Programme Implementation (MoSPI) will begin conducting a new survey to track capital expenditure of private companies on an annual basis, starting this financial year, official sources said.
The survey is likely to contain details of the capex undertaken by private companies in the past few years, and will also include capex projections of those companies for the next couple years, the sources said.
So far, there is no government agency which tracks private capex on an annual or quarterly basis. Policymakers, thus, have to rely on data compiled by some private agencies, such as the Centre for Monitoring Indian Economy (CMIE), to get a timely picture of private capex.
A senior statistician, not willing to be identified, said that a blueprint should be put forth in public for consultations before MoSPI begins such a survey exercise. “Unless the MoSPI survey is offering some more information than what CMIE already offers, it may not be really helpful,” the person said.
The CMIE tracks the private sector investment projects that involve setting up of new capacities. It tracks the announcement of such projects, their implementation, and their final culmination into new capacities.
The statistician added that MoSPI has the adequate capacity and infrastructure to track and compile the private capex data on a periodic basis. “But what matters is the questionnaire. For that, consultations are necessary,” the person said.
As per the latest CMIE data, the value of new investment projects announced fell a sharp 92% on year to Rs 59,900 crore in the June quarter of FY25, extending a declining trend of the previous three quarters, and casting serious doubts on the strength and durability of the new private capex cycle.
In April-June, the growth in the private and government investment announcements declined 94% and 84%, respectively. In value terms, June quarter reported the lowest level of project announcements by both private and the government since September 2009.
Private sector’s share in such new projects plunged to just 66.7% in June quarter, down from 85.4% in March quarter and 90.9% in the previous three-month period.
Moreover, the growth in the private sector’s declaration of investment intents contracted for four quarters in a row to Rs 35,600 crore and that of the government contracted for six quarters in a row to Rs 24,700 crore in the quarter ended June this year, the CMIE data showed.
The Ministry of Finance and the Reserve Bank of India have been repeatedly pointing out that the private sector’s capex has to rise, as at the current levels, given capacity utilisation stands above 76%, the state of investments is not sufficient.
Recently, in an article which was part of the Reserve Bank of India’s monthly bulletin for August 2024, the authors had cited high capacity utilisation, healthy corporate balance sheets and sustained credit demand as reflective of “conducive environment for private corporates to undertake investments going forward”.
