Modest recovery in central capex in Q2FY25, states and corporate capex continued to decline: CareEdge Ratings
Capex), largely driven by a 10.3 per cent year-on-year increase in central government spending, according to CareEdge Ratings report.
Though state-level spending continued to decline, dropping by 3.8 per cent compared to last year, a few states, including Punjab, Assam, Karnataka, Maharashtra, and Rajasthan, showcased resilience by recording double-digit growth in Capex during the first half of the year, highlighting regions of sustained investment momentum despite the broader slowdown.
On the corporate side, the capex for a sample of 1,074 non-financial listed companies totalled Rs 9.4 trillion in FY24, showing a minor reduction from the previous year.
The report also highlighted that, Capex by the central government and major states have been subdued on a year-on-year (YoY) basis, with central capex contracting by 15.4 per cent and state capex decreasing by 10.5 per cent.
RajSinha, Chief Economist at CareEdge Ratings says going forward Capex of the centre and corporate will go up. The subdued capex was mainly because of factors like election-related restrictions, global uncertainties, softer domestic demand, Chinese oversupply, and higher borrowing costs.
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