Investments by CPSEs exceeded 28% of their set targets during April to July
Published on August 7, 2025
India's Central Public Sector Enterprises (CPSEs) are set to break records this fiscal year (2025-26), with capital expenditure (capex) expected to reach an unprecedented Rs. 257,641 crore[1]. This significant increase compared to previous years is evident in the first quarter of 2025, where capex by CPSEs, National Highways Authority of India (NHAI), and Railways rose by approximately 15% compared to the same period last year[5].
The surge in capex by CPSEs is partly attributed to broader economic measures such as proactive monetary policy easing and strong domestic consumption, which have fuelled investment sentiment[4]. As a result, the first quarter capital expenditure by the central government reached 25% of the budget allocation for FY26, as reported by Controller General of Accounts (CGA)[2].
Among the CPSEs, the National Highways Authority of India (NHAI) spent over ₹45,600 crore, NTPC over ₹11,700 crore, and the Railway Board over ₹79,000 crore[6]. The Department of Telecommunication led the list of spenders, utilising 34% of the budget allocation[3]. Road Transport and Highways spent 23% of the budget allocation, while the Railways followed closely with 30%[3][6].
Housing & Poverty Alleviation spent 20% of the budget allocation, and the remaining sectors are expected to contribute to the remaining capex target[7]. The Union Budget provided over ₹11.21 lakh crore for FY26 capital expenditure, of which over ₹2.75 lakh crore was spent during the first quarter[8].
To ensure the effective utilisation of capital expenditure, several key performance indicators have been included in the annual MOU framework for the CPSEs. These include capital expenditure, return on net-worth or return on capital employed, export and import as a percentage of revenue, EBIDTA as a percentage of revenue, and asset turnover ratio[9].
The increased capital expenditure by CPSEs is expected to have a positive impact on the overall growth number, with data to be released on August 29[10]. This significant investment in infrastructure and public sector capacity is consistent with government initiatives to boost economic growth and create employment opportunities[1][5].
References:
- Business Standard
- The Hindu BusinessLine
- Financial Express
- Livemint
- The Economic Times
- Business Today
- The Indian Express
- Money Control
- PIB
- The increased capital expenditure by India's Central Public Sector Enterprises (CPSEs) is attributed to proactive monetary policy easing, strong domestic consumption, and broader economic measures that have bolstered investment sentiment in the business sector.
- The Department of Telecommunication, Road Transport and Highways, and Railways are among the leading CPSEs in terms of capital expenditure (capex) this fiscal year, with the Railways reportedly spending over ₹79,000 crore.
- To monitor the effective utilization of capital expenditure by CPSEs, several key performance indicators such as capital expenditure, return on net-worth, export and import ratios, EBIDTA ratios, and asset turnover ratios have been incorporated into the annual MOU framework for these entities.
- The significant investment in infrastructure and public sector capacity by CPSEs is part of the government's initiatives aimed at fostering economic growth and creating employment opportunities, a move that is expected to have a positive impact on the overall economy.
