Private sector capex to dip by 14 per cent to Rs 72,000 crore this fiscal: Crisil

MUMBAI: That investments are plummeting is a not just a data goof-up is clear if the response of as many as 200 companies, including 30 public sector ones, is any indication which points out that their capital expenditure will tumble by 14 per cent or by Rs 72,000 crore, this fiscal to a low of 35 per cent.

Companies had planned an initial capex of Rs 2.7 trillion this fiscal but a good portion of that will remain only in paper. This southward-ho in the capex will be led by companies in the sectors like cement, textiles, telecom and automobiles, says the Crisil report.

"Investment by private sector companies in our survey is expected to decline by nearly Rs 72,000 crore or 35 per cent this fiscal. Since the private sector accounts for three- fourths of GDP and over 90 per cent of manufacturing output, revival of the private sector investment is critical to lift the sagging economic growth," Crisil managing director and chief executive Roopa Kudva said.

A sector-wise capital investment growth in 2012-13 compared to past three year average is a all red marks with cement showing a 75 per cent decline, textiles plunging 71 per cent, pharmaceuticals declining 51 per cent, telecom dipping 35 per cent, FMCGs slowing by 34 per cent, automobiles dipping by 26 per cent, and oil & gas declining by 19 per cent.

The only green shoots come from other infra which include airports, ports roads etc which are set to growth 17 per cent, IT & ITeS to growth by 25 per cent and metals by a higher 31 per cent.

The poll was conducted by Crisil among 200 companies, 170 of them private sector ones. At 35 per cent capex, the decline in investments by the private sector will be far steeper and lowest in the past four years and comes on top of a 4 per cent decline last fiscal.