Capital expenditure by Indian companies would dip by 14 per cent in 2012-13, says a poll of 200 companies (including 170 private sector companies) by CRISIL Research. By contrast, public sector entities indicated they expected capex to go up by 27 per cent in 2012-13.
Capital investment by public sector companies polled showed a six per cent decline in 2011-12. Over 70 per cent of the polled companies indicated that policy logjam was among the top two factors responsible for the current slowdown in investments.
“Capex by private sector companies in our survey is expected to decline by nearly Rs 72,000 crore or 35 per cent in 2012-13. Since the private sector accounts for three-fourth of India’s GDP and over 90 per cent of its manufacturing output, the revival of private sector investment is critical to lift the sagging economic growth,” said Roopa Kudva, managing director and CEO, CRISIL.
At an overall macro-economic level, the key finding was that capex by companies is slowing. The sectors where capex is expected to decline significantly are cement, textiles, telecom and automobiles.