Optimistic Outlook: Private Capital Expenditure Set for FY25 Surge

A CII survey anticipates an uplift in private capital expenditure in FY25's first half, driven by resilient economic growth and improved business confidence. India's industries are reacting positively to increased employment and rising demand, especially in rural areas, amid global uncertainties and geopolitical challenges.

The Confederation of Indian Industry (CII) has projected a surge in private capital expenditure for the first half of FY25, according to its latest survey report. The findings reveal that 59% of respondents anticipate enhanced private capital spending, a development seen as complementing the uptick in public investment observed recently.

India's economy is maintaining its resilience despite global economic and geopolitical challenges, with the CII Business Confidence Index climbing to a two-quarter high of 68.2 for the July to September period. This is an increase from the previous quarter's 67.3 and slightly higher than last year's 67.1, demonstrating bolstered business sentiment.

The survey also indicates positive industry responses to job market expansions, with nearly half expecting improved hiring in the second quarter. The festive season is expected to enhance growth prospects, although caution due to global uncertainties remains advised by the CII.

Growth drivers identified in the report include improving consumption, particularly rural demand, steady monsoon progress, and signs of private investment. More than half of respondents foresee increased sales and new orders, with 46% predicting capacity utilisation to reach between 75-100% by September 2024, meeting favorable benchmarks for further economic investment.

The Reserve Bank of India notes that 75-80% capacity utilisation is conducive to fresh investments. However, challenges persist, with geopolitical tensions, increasing commodity prices, and declining external demand cited as significant concerns.

The insights are based on responses from over 200 firms across industries and regions, collected during the 128th round of the CII Business Outlook Survey conducted in September 2024. (ANI)

(With inputs from agencies.)