CII Survey Predicts Boost in Private Capital Expenditure in FY25
In New Delhi, a recent survey by the Confederation of Indian Industry (CII) suggests that private capital expenditure is expected to rise in the first half of FY25 compared to the latter half of FY24. This is seen as a positive development supporting public investment, which had previously slowed due to elections.
The survey indicates that 59% of respondents anticipate an improvement in private capital expenditure. Despite global challenges, India’s economic growth remains strong, as reflected in the CII Business Confidence Index, which reached a two-quarter high of 68.2 in the second quarter of FY25.
Industries are optimistic about increased employment opportunities, with nearly half of the respondents expecting better hiring in the second quarter. The festive season is expected to further boost growth prospects, although global uncertainties remain a concern.
Key growth drivers include rising consumption, especially in rural areas, steady monsoon progress, ongoing reforms, and new private investments. Domestic demand is also on the rise, with over half of the respondents expecting increased sales and new orders.
The Reserve Bank of India notes that capacity utilization between 75-80% is favorable for new investments. The survey, conducted in September 2024, involved over 200 firms and highlighted challenges such as geopolitical tensions, rising commodity prices, and weakening external demand.
Doubts Revealed
CII -: CII stands for the Confederation of Indian Industry. It is an organization in India that works to create a good environment for businesses to grow and succeed.
Private Capital Expenditure -: Private capital expenditure refers to the money that private companies spend on buying or upgrading physical assets like buildings, machinery, or technology to grow their business.
FY25 -: FY25 means the financial year 2024-2025. In India, a financial year starts on April 1st and ends on March 31st of the next year.
Business Confidence Index -: The Business Confidence Index is a measure that shows how optimistic or confident businesses are about the economy and their own growth prospects.
Geopolitical tensions -: Geopolitical tensions refer to conflicts or disagreements between countries that can affect global peace and economic stability.
Global commodity prices -: Global commodity prices are the prices of basic goods like oil, metals, and food that are traded internationally. Changes in these prices can impact the cost of living and business expenses.
