Private Capital Expenditure Set to Improve in First Half of FY25: CII Survey

The Confederation of Indian Industry (CII) has projected an improvement in private capital expenditure in the first half of FY25, according to its latest survey report. The survey, which involved over 200 firms across various industries and regions, revealed that 59% of respondents expect higher private capex in FY25 compared to the second half of FY24, indicating a positive trend that complements public investment.

Economic Resilience Amid Global Challenges

The survey noted that despite global economic and geopolitical uncertainties, India’s economic growth has remained resilient. This optimism is reflected in the CII Business Confidence Index, which surged to a two-quarter high of 68.2 in the July-September period of FY25, up from 67.3 in the previous quarter.

Increased Employment and Capacity Utilization

Positive business sentiments were also evident in the employment sector, with nearly half of respondents expecting better hiring prospects in the second quarter of FY25. Additionally, 46% of respondents anticipate their company’s capacity utilization to range between 75-100% by September 2024. The Reserve Bank of India (RBI) considers this level of utilization a favorable indicator for driving fresh investments.

The report identified several factors contributing to this optimistic outlook, including improving rural consumption, a steady monsoon, ongoing reforms, and fresh signs of private investment. However, the survey also flagged challenges such as rising global commodity prices, geopolitical tensions, and weakening external demand as potential concerns for businesses.

The survey results come as India gears up for the upcoming festive season, which CII believes will further bolster growth prospects.