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Pvt sector capex likely to expand amid expectations of high growth: Experts

May 12, 2024
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Private sector capital expenditure is likely to see a gradual expansion and private investment proposals sanctioned by banks rose by nearly Rs 1 lakh crore to Rs 3 lakh crore in the last year alone. Indian economy is expected to grow 6.8% this fiscal and gross fixed capital formation grew 10.2% in FY24, but it was largely driven by Government capital expenditure.

The sectors like cement and steel, which have already invested quite a bit, certain segments of the auto industry, and certain areas of pharmaceuticals and chemicals where they have to run into capacity constraints.

Low demand is a concern and continues to weigh on investment sentiment but private consumption rose only 3% in FY24. The demand conditions will have to remain much stronger for much longer for capex to pick up. Rising input cost amid a surge in metal prices are also seen as an overhang on corporate sector sentiment.

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