Private capex plans drop 16 percent in FY27 vs FY26.
Power sector's capex share jumps from 9 percent to 14.9 percent.
Firms focus more on machinery upgrades than new projects.
A new government survey reveals a sharp pullback in corporate investment, as India Inc turns its focus toward energy and electricity amid a broader spending slowdown.According to the latest survey by the Ministry of Statistics and Programme Implementation (MOSPI), covering the October-December 2025 quarter, companies plan to spend Rs 9.55 lakh crore on capital expenditure in FY27—a 16 percent decline from the Rs 11.43 lakh crore recorded in FY26.
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The numbers signal a cautious corporate mood, likely shaped by global headwinds. A comparison of over 3,800 companies offers a more reassuring picture. These firms project spending of Rs 6.1 lakh crore in FY27—virtually flat against the figures in FY26 and Rs 6 lakh crore in FY25. The MOSPI survey also shows that actual capex in FY25 averaged Rs 173.5 crore per enterprise, translating into a realisation ratio of 96.3 percent, meaning companies spent almost exactly what they said they would.
Power plays as manufacturing fadesA closer look at the sectoral split reveals a significant rebalancing underway. Manufacturing, traditionally the sector with the largest share in private capex, is losing ground—its share slipping from 50.2 percent in FY26 to 44.4 percent in FY27.
The big gainer is electricity, gas and air conditioning supply, whose share nearly doubles, jumping from 9 percent to 14.9 percent in FY27. This reflects the accelerating push toward power infrastructure, renewables, and energy transition investments.
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Information and communication, another key growth sector, sees a modest dip from 16.4 percent to 14.4 percent, while transportation and storage holds relatively steady at 5.5 percent.
Machinery takes centre stage
On the asset side, companies are increasingly directing capex toward machinery and equipment—its share rising from 64 percent in FY26 to 70.4 percent in FY27. This suggests that whatever investment is happening is productivity-focused, firms are upgrading production capacity rather than building new premises or acquiring land.
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Capital work in progress falls sharply from 15.9 percent to 10.5 percent, hinting at fewer large greenfield projects. Land acquisition, at 4.2 percent in FY26, drops to 3 percent in FY27.
The FY26 investment strategy data further reinforces this shift toward operational stability. Nearly half of the surveyed companies (49 percent) are doubling down on core assets.
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A significant 38 percent of firms intend to focus on enhancing and upgrading existing assets, aligning with the broader trend of machinery modernisation, while a smaller 14.5 percent are targeting strategic high-growth opportunistic assets. But a lack of long-term clarity persists for some, with roughly 20 percent of respondents reporting no specific investment strategy for the period.
