Business EconomyPosted at: Sep 27 2026 3:11PM


Private sector capex seen rising to Rs 3.2 lakh cr in FY27: RBI Bulletin

New Delhi, Sep 27 (UNI) Private sector investment is expected to remain strong in the current financial year despite continued uncertainty in the global economy, with capital expenditure projected to rise to around Rs 3.2 lakh crore in FY27 from Rs 2.6 lakh crore in the previous year, according to a report published in the Reserve Bank of India’s September Bulletin.
The report pointed to continued optimism among Indian companies, with the total cost of projects reaching a record Rs 4.4 lakh crore in FY26, up from Rs 3.7 lakh crore a year earlier. Infrastructure remained the biggest area of investment, with the power sector emerging as the main driver, followed by roads and bridges.
According to the RBI report, the investment pipeline for FY27 also indicates that the private sector investment cycle could maintain its momentum. The assessment is based on projects financed through bank and financial institution sanctions, external commercial borrowings (ECBs) and initial public offerings (IPOs).
However, the report cautioned that strong investment intentions do not automatically translate into immediate capital formation. The pace at which planned investments materialise will depend on how quickly sanctioned projects are executed as well as developments in the global economic environment.
The report said the investment outlook remains positive, although elevated global uncertainty could weigh on corporate investment sentiment. The assessment was made by researchers from the RBI’s Department of Statistics and Information Management, and the report clarified that the views expressed are those of the authors and not necessarily those of the central bank.
Infrastructure accounted for 54.2% of the overall project cost during FY26, making it the largest investment category. Power projects accounted for a major portion of infrastructure investment, while roads and bridges were another significant contributor.
Several other sectors also attracted substantial investment, including construction, chemicals and pesticides, metals and metal products, and cement.
Maharashtra emerged as the largest destination for new capital expenditure projects during FY26. Gujarat, Rajasthan, Karnataka, Andhra Pradesh and Tamil Nadu followed. Together, these six states accounted for 67.1% of the total project cost during the year.
The share of Maharashtra, Rajasthan and Karnataka in total project costs increased compared with the previous year, according to the report.
The RBI report also highlighted the continued preference for greenfield investments, which involve setting up new projects or capacity rather than simply expanding existing facilities.
Greenfield projects accounted for 89.2% of the total cost of projects reported by banks and financial institutions during FY26. The RBI researchers said the high share points to ongoing capacity creation and continued corporate confidence in India's medium-term growth prospects.
During the year, banks and financial institutions sanctioned 12 mega projects and 100 large projects. Mega projects accounted for 17% of the total project cost, while large projects represented 51.3%.
The report also noted a strengthening of external commercial borrowing as a source of funding for corporate investment, even as mobilisation through IPOs declined.
The RBI said Indian companies have also benefited from stronger balance sheets in recent years, supported by lower leverage and healthy internal cash generation. At the same time, the banking sector's stronger capital and liquidity positions, improving asset quality and continued credit growth have helped support investment activity.
Overall, the project pipeline suggests that private investment could continue to contribute to economic growth in FY27. However, the actual impact on economic activity will depend on how quickly companies execute these projects and how global economic conditions evolve.UNI VK AAB
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