A private capex slump: An imperfect but indicative survey points to one
India’s new survey on private investment intentions can track the broad ups and downs of a key deficiency in our economy: private investment. But the survey’s lens is unclear and its findings are indicative at best.
India’s wait for a boom in private-sector capital expenditure has been like ‘waiting for Godot,’ to borrow the title of a Samuel Beckett play about endless anticipation. Last year’s flickers of hope are expected to dim in 2025-26, going by the Forward-Looking Survey on Private Sector Capex Investment Intentions, a first-of-its-kind exercise by the government, which released its findings on Tuesday.
The survey projects intended private capex at almost ₹4.9 trillion this fiscal year, about a quarter less than last year’s plans. The slump reflects “cautious planning after a strong 2024-25," according to the statistics ministry. Every sector does not foresee a spending dip, though. Manufacturers plan to raise their investments to ₹2.1 trillion, 40% more than last year’s level.
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Construction is another sector that reveals an intent to invest more. Yet, by and large, businesses expect to cut back. The survey also sought data on actual capital expenditure in previous years, with the numbers adding up to ₹4.2 trillion in 2023-24, ₹5.7 trillion in 2022-23 and nearly ₹4 trillion in 2021-22. Taken together, the ups and downs of this curve outline the story of a key economic deficiency: private investment.
The survey was conducted by the National Statistical Office from November 2024 to January 2025 via an online platform that offered chatbot assistance. If filling out the input forms was a complex task, the sample selection process was even more so.
As the survey covers only large active companies registered with the ministry of corporate affairs, the initial pool included manufacturers with annual turnovers of at least ₹400 crore, trading businesses with at least ₹300 crore and others with toplines of ₹100 crore or more.
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Of 16,025 such firms, less than a third were picked for the exercise. How? To balance size as a criterion with sectoral diversity, enterprises that made the initial cut were slotted into 17 strata by their business focus. Those in strata with 100 players or fewer were directly enrolled in the sample, while businesses in other strata were sorted by their fixed assets so that larger ones could be included and some of the smaller ones could be picked randomly—but in a ratio to fill slots determined by the size of their strata.
Finally, 5,380 entities were asked to respond. Since mega-corps operate in fields with rather few rivals, their inclusion in the sample can largely be assumed. But the survey’s data must not be taken as hard fact. The complexity of how it was put together is one reason. Its low response rate is another. Just 58.3% responded, with a little over 40% revealing their plans for 2025-26.
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This raises the question of a ‘self-selection bias,’ as the data only captures the plans of businesses ready to reveal them. As the statistics ministry’s release admits, respondents “appeared cautious in disclosing capex plans." To the ministry’s credit, it has called the results “indicative," best used to detect broad trends more than anything else. Its actual capex numbers offer us a snapshot alright, but one that’s far from perfect.
To the extent this new survey tells us which way private investment may be going, it could serve a useful purpose. The slump it foresees may already have served as an input for the finance ministry’s monthly review of India’s economy, the March bulletin of which warns that perceptions of uncertainty “may cause the private sector to put its capital formation plans on hold." This is not good news at all for the Indian economy. But the point is to face it squarely. Which this survey helps us do.
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