The composition of investment has shifted in favour of private players post-pandemic, with their share rising to 71.3% of project announcements between 2022-23 and 2025-26 from a government-dominated 54.2% in the four years preceding COVID-19, according to a research report by Bank of Baroda citing CMIE data.
The shift shows a broader pick-up in private capital expenditure despite a volatile global environment marked by geopolitical tensions and trade disruptions, with domestic demand providing a buffer to the economy.
Investment momentum has been supported by improving demand conditions, reflected in a rise in capacity utilisation in the manufacturing sector to around 74-75% in recent years, the BoB research report said.
Gross fixed capital formation has also tracked trends in new project announcements over the past decade, pointing to a close link between investment intentions and actual spending.
Sector-wise, investment remains tilted towards infrastructure and heavy industries. Electricity and transport services together accounted for nearly half of total project announcements worth about 191 lakh crore rupees between FY23 and FY26, reflecting continued expansion in power generation as well as aviation and railway capacity.
Chemicals and metals accounted for a significant share of investments, linked to infrastructure demand, while information technology attracted close to 6% of the total, driven by spending on artificial intelligence and data centres.
By contrast, consumer-oriented sectors such as automobiles, food processing, textiles and consumer goods accounted for a relatively smaller portion of planned investments, indicating uneven demand trends across segments.
Recent data show the trend extending into the current financial year, with project announcements worth about 13.5 lakh crore rupees in the period from April to mid-June 2026, led by electricity and IT-enabled services, which together dominated new proposals.
Within technology, investments are increasingly focused on data centres and AI-related infrastructure, while power investments are being driven by both conventional and renewable energy requirements, the report said.
The report added that the investment outlook remains favourable, supported by policy efforts to improve the business environment and sustained demand for digital infrastructure and clean energy.
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