The economy now urgently needs private sector participation to sustain momentum

ANI New Delhi

The intended private capital expenditure (capex) for FY26 is significantly lower than the numbers of FY25, and may decline further amid the impact of US tariffs, according to a report by the State Bank of India (SBI). The report highlighted that while government spending has been driving growth, the economy now urgently needs private sector participation to sustain momentum.

It stated "Data........ indicated that the intended capex for FY26 is significantly lower than the FY25 numbers" The report stressed that private investors must "hold the baton now," as muted private investment remains a major concern for sustainable growth.

Based on a survey of 2,170 enterprises conducted in April 2025 across agriculture, manufacturing, IT and other sectors, SBI noted that the intended capex for FY26 is not only below FY25 levels, but also faces risks of further weakening due to global trade headwinds.

According to the data in the report, actual private capex stood at Rs 3.9 lakh crore in 2021-22, rising to Rs 5.7 lakh crore in 2022-23, before declining sharply to Rs 4.2 lakh crore in 2023-24. In recent years, private capex has stagnated at around Rs 4.9-6.6 lakh crore.

The intended investment for FY26 is pegged at Rs 6.6 lakh crore, but the report highlighted that this is still not very encouraging when compared to the scale required for higher economic growth.