India's capital expenditure outlook has improved after the recent state elections, suggesting a potential rebound in government and private sector spending in the second half of FY25.

Listed corporate capex reached nearly Rs 10 trillion in the twelve months ending September 2024. Experts expect that post-election clarity will boost public infrastructure investments, while private capital expenditure is predicted to pick up after Q1 2025 due to favorable economic conditions.

The government has set an ambitious capex target of Rs 11.11 lakh crore for FY25, significantly higher than the previous year's spending of Rs 9.5 lakh crore. Although there may be some underperformance against this target, it is expected to represent a substantial year-on-year increase. Ajay Seth, Secretary of the Department of Economic Affairs, stated that last year's budgeted capex of Rs 10 lakh crore was achieved at 95 percent, and a similar performance is anticipated this year. He emphasized that any delays in spending due to elections will be offset by growth in other sectors, indicating a strong outlook for capital expenditure going forward.