India's corporate sector is exhibiting a notable shift in its investment strategies, characterized by a significant reduction in capital expenditure (capex) plans and a concurrent increase in financial investments. According to the National Statistics Office's (NSO) survey, private sector capex intentions have declined by 16.5% to 7.55 trillion in the fiscal year 2026-27, down from 7.44 trillion in the previous year. ( noted that the Centre’s capital expenditure push has led to a revival in private investment and growth in order books across sectors.
Despite these government efforts, the private sector remains cautious. The Union Budget 2026 allocated a substantial 12.2 lakh crore for infrastructure, equivalent to 3.1% of GDP, and announced targeted measures to encourage private investment. However, a structural "private sector pause" persists, indicating that businesses are still wary of investing amid concerns over political unpredictability, policy risks, and lack of administrative certainty.