Informist, Thursday, Sep 12, 2024

--Statistics min source: To conduct pvt sector capex survey Oct-Dec

--Statistics min source: To release capex survey results by Feb

By Shubham Rana

NEW DELHI - The statistics ministry will conduct a survey in Oct-Dec on the status of private sector capital expenditure. The results of the survey are likely to be made public by February, a ministry official said today.

"We are beginning the survey on Oct 1 for a three-month period, and you can expect the results by February," the official told Informist on the condition of anonymity.

The survey will compile information on the projected capital investment of the private sector for the next two years in addition to the capital expenditure undertaken in the last three years. "This will be an annual survey and the sample size would be 6,000-7,000 entities," the official added.

At a time when the Indian government is pushing hard to boost economic growth by ramping up public capital expenditure, the status of private investment in the country remains unclear. The government, particularly Chief Economic Adviser V. Anantha Nageswaran, has often pointed at the growth in capital expenditure of listed companies as a sign of rising investment from the private sector.

Even Reserve Bank of India Governor Shaktikanta Das had said in August that "private corporate investment is gaining steam on the back of expansion in bank credit".

According to the latest national accounts data, growth in gross fixed capital formation – a proxy for investments – in 2023-24 (Apr-Mar) was 9.0%, up from 6.6% the previous year.

Meanwhile, some economists say that while investments by listed companies have indeed grown, that by unlisted firms have not due to their weak financial position. According to economists Nikhil Gupta and Tanisha Ladha of Motilal Oswal Financial Services, the unlisted corporate sector being "much bigger" than its listed counterpart suggests that overall private investment in India may not be growing much.

"...while the financial position of listed sector has improved markedly in the post-COVID period (FY20-FY23), this is clearly not the case for the aggregate corporate sector. It means that the financial position of the unlisted corporate sector has weakened in the post-COVID period," Gupta and Ladha said in a report in December.

"Our calculations also suggest that total investments registered a CAGR (Compound annual growth rate) of 6% in the post-COVID period, slower than 9% in the pre-COVID period. Within that, listed companies' capex grew at a faster pace of 11.2%, implying that the unlisted sector's capex registered a CAGR of just 3.8%, less than half of 8.1?fore COVID," they added. End

Edited by Vandana Hingorani

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