According to a recent report, both the private sector and central and state governments have collectively announced capital expenditure projects amounting to Rs 8.6 lakh crore in the first half of the financial year, marking a significant 32% decline from the same period in the previous year as reported by Nirmal Bang Institutional Equities. This decline can be attributed to a 21% decrease in capital expenditure announcements by the central government and a nearly 34% drop in announcements by the private sector.
During this period, the private sector took the lead in capital expenditure announcements, accounting for Rs 6.11 lakh crore, followed by the central government with Rs 1.86 lakh crore, and state governments with Rs 65,300 crore. The private sector's share of the total capital expenditure announcements stood at 71%, slightly lower than the 73.4% share it had in the corresponding period last year. Excluding air transport, the private sector experienced an 18% increase in capital expenditure announcements, reaching Rs 5.1 lakh crore during April to September.
Among the sectors, renewable energy projects accounted for 17% of the total projects by value, while the housing and chemical sectors represented 14% and 13% respectively. Notably, the automobile sector saw an all-time high of 12% capital expenditure announcements. The report highlighted that capital expenditure announcements for sectors like housing, automobile, commercial complexes, and hotels were particularly robust, aided by factors like production-linked incentives and investments in electric and hybrid vehicles.