Private capex puzzle: RBI sees ₹5.6 lakh crore pipeline, NIPFP flags weak investment conversion

India’s private investment cycle is showing two contrasting signals: investment intentions and project announcements have strengthened sharply, but the actual share of private investment in the economy remains under pressure. While the Reserve Bank of India (RBI) sees a growing pipeline of projects and rising capacity creation, a National Institute of Public Finance and Policy (NIPFP) analysis points to a gap between announced projects and actual capital expenditure.

According to an RBI Bulletin study, Indian companies recorded investment intentions of ₹5.6 lakh crore across 1,839 projects in FY26, up from ₹5 lakh crore across 1,581 projects in FY25. The value of proposed investments increased by nearly 12%, while the number of projects rose around 16%.

RBI sees green shoots in private investment

The RBI data shows that banks and financial institutions sanctioned 1,032 projects worth ₹4.4 lakh crore in FY26, compared with 907 projects worth ₹3.7 lakh crore a year earlier. Around 55% of the project cost was financed by banks and financial institutions.

Other financing channels also remained active. As many as 509 private non-financial companies raised ₹1.05 lakh crore through external commercial borrowings (ECBs) for capital expenditure, while 298 companies raised ₹23,809 crore through domestic equity issuances.

Infrastructure accounted for 54.2% of the total cost of projects sanctioned by banks and financial institutions, with power emerging as the largest segment, followed by roads and bridges. Construction, chemicals and pesticides, metals and metal products, and cement also attracted significant investment.

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The composition of projects was another positive signal. Greenfield projects accounted for 89.2% of total project costs, suggesting that a large portion of the pipeline involves fresh capacity creation rather than merely modernisation of existing facilities.

The RBI expects the momentum to continue into FY27, with envisaged capex through bank and financial institution financing, ECBs and IPOs projected at ₹3.2 lakh crore, compared with comparable capex of ₹2.6 lakh crore in FY26.

NIPFP highlights the conversion problem

However, NIPFP’s August 2026 policy brief, Navigating India’s Private Capex, presents a more cautious picture. It found that private investment as a share of GDP declined to 10.3% in FY25 from 10.9% in FY23, despite stronger corporate profitability and government measures to support investment.

At the same time, private-sector project announcements more than doubled to ₹104 lakh crore during FY24-FY26, from around ₹56 lakh crore in FY21-FY23.

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NIPFP said companies are increasingly accumulating cash rather than committing it to greenfield capital expenditure. It also identified geopolitical uncertainty, input-cost volatility, market conditions and promoter risk aversion as important constraints.

The sectoral pattern, however, is changing. Investment is increasingly moving towards renewable energy, data centres, electronics and other new-economy sectors. NIPFP said the share of private investment in renewable energy, conventional energy and IT-enabled services rose to 38% in FY24-FY26 from 25% in FY21-FY23.

RBI vs NIPFP: What the private capex data shows

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Intentions versus actual spending

Taken together, the two reports suggest that the private investment story depends increasingly on execution rather than announcements alone. The RBI’s data indicates stronger financing and a substantial pipeline of greenfield projects, while NIPFP highlights the risk that announced investments may not fully translate into completed capacity and actual capital formation.

The RBI itself cautioned that delays, changes in investment plans and cancellations can affect realised spending. The key indicator for the private capex cycle, therefore, will be how much of the current investment pipeline moves from proposal and sanction to actual construction, commissioning and productive capacity.