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Informist, Thursday, Nov. 28, 2024

MUMBAI – The private sector and central and state governments announced capital expenditure totalling INR 8.6 trillion in Apr-Sept, down 32% from the same period last year, Nirmal Bang Institutional Equities said in a report. This was due to a 21% fall in capex announcements by the central government and nearly 34% lower announcements by the private sector.

In the first half of this financial year, the private sector announced capital expenditure of INR 6.11 trillion, central government announced capex of INR 1.86 trillion, and the state governments INR 653 billion. Share of the private sector in the total capital expenditure announcements was 71%, slightly lower than 73.4% in the same period last year. 

Capital expenditure announcements, excluding air transport, during Apr-Sept by the private sector were up 18% on year from INR 5.1 trillion. Capital expenditure on renewable energy accounted for 17% of the total projects by value, housing sector 14%, and chemical sector 13%, which was significantly lower from the peak of 35%. Of the total projects, the capital expenditure announced for the automobile sector was 12%, an all-time high.

The capital expenditure announcements for several sectors such as housing, automobile, commercial complexes, and hotels were the highest, the broking firm said. In the case of the automobile sector, production-linked incentive schemes and investments in electric as well as hybrid vehicles supported the all-time high capital expenditure announcements. Housing project announcements were at a peak and primarily comprised of projects in metropolitan and tier-I cities. This was due to the culmination of the real estate upcycle, which focussed on the luxury and upscale segment, the brokerage said.

In Apr-Sept, capital expenditure announcements by the central government, especially by central public sector undertakings, were down 21.4% on year, but those by the National Highways Authority of India grew 174%. Announcements for railway projects saw a sharp fall of 88.5% on year, while announcements for renewable energy were almost zero, and the state government project announcements declined 34%, the brokerage said. Road transport projects led the state government announcements and accounted for 58% of the total, followed by water supply and sanitation projects accounting 11% share.   End

Reported by Akash Mandal and Akshita Kumar 

Edited by Ashish Shirke

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