Forbes India
Fresh investment announcements have plummeted to their lowest levels in over five years as the focus shifts from launching new ventures to completing existing projects.Data from Projects Today, compiled by Forbes India, shows that total capital expenditure (capex), combining government and private investment, fell 54.9 percent (year-on-year) to Rs 9.1 lakh crore in Q4FY26, the sharpest quarterly decline in over five years. Private capex fared no better, contracting 47.5 percent in the same period.The data covers 50,000 projects announced across all project stages—nascent, planning, and under execution.A temporary pauseThe numbers mark a striking reversal from the highs seen just a year earlier. After a 134 percent surge in Q1FY26, with investments exceeding Rs 21 lakh crore, and continued 62 percent growth in the second quarter, momentum has stalled. The Q4FY26 data now confirms the second consecutive quarterly decline in overall capex announcements.Analysts at Projects Today, however, urge caution when reading the numbers. “The current statistics indicate that the central government is primarily focusing on execution and completion of already announced projects, rather than introducing new investments in Q4FY26,” the firm said. “This has led to a noticeable decline in fresh capex announcements during the quarter.”Crucially, they view this as a phase, not a trend. “At this stage, this appears to be a temporary phase rather than a structural concern. We expect fresh project announcements to pick up in the coming months,” the firm explained.Similarly, the volume of fresh investment projects has consequently decelerated, falling to 3,570 in Q4FY26 from 5,527 during the same period last year.Also Read: World Bank sees India growing 6.6 percent in FY27Private capex: A sharp correctionPrivate capex, covering Indian and foreign private companies, contracted 47.5 percent to Rs 6.6 lakh crore in Q4FY26. Q1FY26 had seen private capex surge 149.1 percent to almost Rs 15 lakh crore, followed by a 79.2 percent rise in Q2FY26. The correction in Q3FY26 had already flashed a warning sign, with private capex declining 13.5 percent, and Q4FY26 has only deepened that trend.Within this, the Indian private sector saw its investment plummet by 52 percent in Q4FY26, marking the steepest decline since the pandemic. In contrast, fresh foreign investment bucked the trend, surging 22 percent to Rs 90,000 crore during the same quarter.Government capex: Consolidation over expansionThe most dramatic pullback came from the public sector. While overall capex announcements dipped by 54.9 percent, government-led plans dropped at a much steeper 67 percent to Rs 2.5 lakh crore, signalling a clear pivot toward project consolidation over new expansion. While state government capex dropped by 57 percent, central announcements did so by 76 percent in the same quarter.Consequently, the government’s share in total capex shrank to 27 percent in Q4FY26, down from 34.3 percent in Q3FY26, as the private sector’s share climbed to 73 percent.Power playsA fundamental rebalancing is underway within the sectors that are spending. Basic metals lead capex allocation at 22.2 percent in Q4FY26, followed by renewable energy at 12.6 percent and road infrastructure at 11.4 percent. Data centres, at 8.3 percent, now rival residential buildings at 10.7 percent, signalling that digital infrastructure is fast becoming a mainstream capex category.What’s in store for FY27An earlier survey by the Ministry of Statistics and Programme Implementation showed that companies plan to spend Rs 9.55 lakh crore on capex in FY27—a 16 percent decline from Rs 11.43 lakh crore in FY26, likely shaped by global headwinds.However, a narrower cohort of over 3,800 firms project spending of Rs 6.1 lakh crore, virtually flat against FY25 and FY26 levels. Manufacturing’s share in corporate capex is set to slip from 50.2 percent in FY26 to 44.4 percent in FY27, while electricity and energy supply nearly doubles its share to 14.9 percent in a move to accelerate India’s energy transition.On the asset side, companies are directing capital toward machinery and equipment, whose share is likely to rise from 64 percent in FY26 to 70.4 percent in FY27. Capital work in progress, a proxy for greenfield activity, fell sharply from 15.9 percent to 10.5 percent, and land acquisition dropped from 4.2 percent to 3 percent.
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