"About 90 per cent of corporate India expects a pick up in overall capital investments next fiscal, but their own capital investment plans actually indicate a 4 per cent decline, while the capex by the private companies is likely to decline more at 11 per cent," Crisil Senior Director Prasad Koparkar told reporters here today.
The finding is based on a survey of 192 companies, which comprise about 45 per cent capex undertaken by all NSE-listed firms, except those in the banking, financial services and insurance sectors, in 2013-14.
Over 80 per cent capex is expected to come from oil & gas, power and roads and metals sectors in FY16. Till there is improvement in demand, private sector will prefer to wait than intrepidly commit more skin, Crisil said in its report based on the survey.
"In such a scenario, the ability of the government to kick-start investments through fiscal measures, especially given the additional elbow room afforded by falling crude prices, is crucial," Koparkar said.
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He said debottlenecking steps taken by the government and tailwinds from the crash in crude oil prices have infused sanguinity into the economy, even pushing growth up mildly.
"With inflation hovering inside the RBI target and CAD (current account deficit) reined in, we are truly a bright spot among emerging markets," Koparkar said, but added domestic investments aren't picking up.
Crisil also separately conducted an analysis of 203 large companies to estimate their ability to fund capex plans for FY16. "Based on assessment of indebtedness of companies (total outside liabilities/tangible networth), 72 per cent have high ability to fund their planned capex, 8 per cent moderate ability and 20 percent have low ability," it said.