Surge in Private Investment Driven by Government Capital Expenditure
Govt capex drives private investment surge; CII urges price restraint
MintImage: Mint
The Confederation of Indian Industry (CII) reports that government capital expenditure has spurred a 67% year-on-year increase in private investment, reaching ₹7.7 trillion by September 2025. CII urges businesses to manage input costs and suggests a gradual rollback of fuel excise duty as part of a broader strategy to stabilize the economy amidst external pressures.
- 01Private investment rose 67% year-on-year to ₹7.7 trillion.
- 02Manufacturing sector accounted for ₹3.8 trillion of private capex.
- 03CII calls for gradual rollback of fuel excise duty to manage inflation.
- 04Capacity utilization in factories increased to 75.6%.
- 05Bank credit growth surged to nearly 14% in the second half of FY26.
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The Confederation of Indian Industry (CII) has highlighted a significant revival in private investment, attributing this to the government's robust capital expenditure program. As of September 2025, private capital expenditure surged by 67% year-on-year, totaling ₹7.7 trillion. The manufacturing sector led this growth, contributing ₹3.8 trillion, while services added ₹3.1 trillion. CII director general Chandrajit Banerjee noted that private enterprises are investing at levels not seen in over a decade, with capacity utilization in factories rising to 75.6%. The CII also urged businesses to absorb input cost pressures and proposed a gradual rollback of the ₹10 per litre excise duty cut on petrol and diesel over 6-9 months. This recommendation comes amid concerns about inflation and interest rates due to the ongoing West Asia crisis, which could temporarily impact India's growth rate. Finance Minister Nirmala Sitharaman reassured that the government would safeguard Indian businesses from external volatility.
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The surge in private investment and government spending could lead to job creation and economic stability, but rising fuel prices may affect consumer spending.
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