According to the report published in the September bulletin of the Reserve Bank of India (RBI), private sector capital expenditure is expected to remain resilient in the current fiscal year, reaching a projected 3.2 trillion rupees compared to 2.6 trillion rupees in the previous year.
The sustained confidence in the private sector was reflected in the aggregate project value for the 2026 fiscal year, which reached a record 4.4 trillion rupees, surpassing the 3.7 trillion rupees recorded in the 2025 fiscal year. Infrastructure continues to dominate the investment landscape, led by the energy sector. The report also emphasizes that the pace of actual capital formation depends on the timely execution of approved projects and changes in the external environment.
The profile of phased project financing through all three channels—bank and financial institution sanctions (FI), external commercial borrowings (ECB), and initial public offerings (IPO)—indicates an increase in planned capital expenditure in 2026–2027 compared to the previous year. This suggests that the cycle of private investment is likely to maintain its momentum and continue supporting economic growth.
In the report, prepared by Purnendu Kumar, Snigdha Yogindran, Sukti Handekar, and Bhavyashri K from the RBI's Department of Statistics and Information Management, it is noted that the investment outlook remains favorable, although increased global uncertainty may curb investor sentiment. It was clarified that the views expressed in the report belong to the authors, not the central bank.
The report also states a significant strengthening of the balance sheets of Indian corporations in recent years, driven by reduced debt burden and strong domestic savings. Simultaneously, the domestic banking system, supported by robust capital and liquidity buffers, improved asset quality, and stable credit growth, continues to support economic activity.
During 2025–2026, the infrastructure sector remained the main contributor, accounting for 54.2 percent of the total project value, primarily due to investments in energy, followed by roads and bridges. In addition to infrastructure, sectors such as construction, chemicals and pesticides, metals and metal products, and cement also accounted for a significant share of the total project value.
Among the states, Maharashtra emerged as the leading destination for capital expenditure projects, followed by Gujarat, Rajasthan, Karnataka, Andhra Pradesh, and Tamil Nadu. These six states collectively accounted for 67.1 percent of the total project value in 2025–2026. The share of Maharashtra, Rajasthan, and Karnataka increased compared to the previous year.
The report further noted the strengthening of financing through the ECB channel, although the volume of funds raised through IPOs decreased. In 2025–2026, banks and FIs sanctioned 12 mega projects and 100 large projects; the share of mega projects and large projects in the total project value was 17.0 percent and 51.3 percent, respectively.
It was also observed that 89.2 percent of the total project value presented by banks and FIs in 2025–2026 related to greenfield projects, consistent with past trends. The predominance of investments in new projects in the portfolio reflects ongoing capacity expansion and confidence in medium-term growth. At the same time, alternative financing channels, such as ECB, foreign direct investment (FDI), and private placements, have expanded the base of corporate investment financing.