Private companies are expected to invest Rs 6.6 lakh crore in FY26, which is lower than the previous year (FY25). According to a report by the State Bank of India (SBI), this slowdown could worsen because of challenges like US tariffs and global trade issues.
The SBI analysis highlights that while the government is spending heavily on infrastructure and other projects, the private sector is not matching up. For India’s economy to grow steadily, private companies also need to increase their investments.
SBI’s survey, conducted in April 2025 with 2,170 companies across sectors like agriculture, manufacturing, and IT, showed that businesses are holding back on capital expenditure (capex).
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Here’s how private investment has moved in recent years:
- 2021-22: Rs 3.9 lakh crore
- 2022-23: Rs 5.7 lakh crore
- 2023-24: Rs 4.2 lakh crore
- Recent years: Between Rs 4.9–6.6 lakh crore
Although FY26 projects Rs 6.6 lakh crore, experts say this amount is still not enough to boost the economy to its full potential.
The report also explained that government spending has a strong impact on economic growth. For every rupee the government spends, the economy grows by more than one rupee (with a “capex-to-GDP elasticity” of 1.17). But since private companies are not investing enough, the overall growth effect remains limited.
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The government is pushing the economy forward, but private businesses are not investing enough to keep the momentum strong.
