The 97th Survey of Projects Investment in India highlights a deceleration in private sector investments during Q3 of FY25, despite overall growth being bolstered by government-led initiatives. The government sector sustained its momentum from Q2 into Q3, driving a 9.87 percent increase in total investment value—from Rs 10.43 lakh crore in Q2 to Rs 11.46 lakh crore in Q3—alongside a significant rise in the number of projects, which increased from 2,407 to 3,292.
Projex by Ownership
Government investments experienced notable growth, rising by 22.75 percent in value, with their contribution to the total investment increasing from 33.81 percent in Q2 to 37.77 percent in Q3. The growth was fuelled by state and central government initiatives, particularly in infrastructure sectors like Roads, Water Supply, Power Distribution, and Irrigation. State governments registered a 34.59 percent surge in fresh investment, while central government capital expenditure grew by 11.82 percent, directed primarily toward Roads, Power (both conventional and renewable), and Ports.
Meanwhile, the Private sector saw mixed results. Overall, private investment grew by a modest 3.29 percent in Q3, largely due to a substantial 44.16 percent jump in foreign investment, which offset a 1.41 percent decline in Indian private sector capex. The share of foreign investment in total capital expenditure rose from 6.82 percent in Q2 to 8.95 percent in Q3, driven by a Rs 70,000 crore super mega steel plant of ArcelorMittal Nippon and 16 Renewable energy projects incentivized by the government. Conversely, the Indian private sector’s investments were spread across diverse sectors such as Renewable energy, Ports, Real Estate, Electronics, Cement, and Steel.
Projex by States
Among states, Rajasthan emerged as the leader in fresh investments during Q3, supported by significant contributions from the Power and Road infrastructure sectors. The state announced 67 new power projects worth Rs 1.34 lakh crore and 83 road projects valued at Rs 53,207.96 crore, among others, contributing 94.2 percent of its total investments.
Maharashtra, which held the top position in Q2 with Rs 2.68 lakh crore across 513 projects, slipped to second place in Q3, despite an increase in the number of projects to 592. Its total investments fell to Rs 1.79 lakh crore, likely impacted by the state election process in November 2024.
Gujarat also experienced a decline in investments, dropping from Rs 1.49 lakh crore in Q2 to Rs 1.34 lakh crore in Q3, and moved to third place. Karnataka, which ranked third in Q2, fell to fifth place as investments dropped from Rs 1.18 lakh crore to Rs 89,289.54 crore.
Andhra Pradesh saw a remarkable surge in investments, doubling its project value from Rs 32,178.28 crore in Q2 to Rs 92,907.15 crore in Q3, propelling it from ninth to fourth place. Similarly, Uttar Pradesh climbed from seventh to sixth with investments growing to Rs 68,324.06 crore.
Other notable changes included Odisha moving from eighth to seventh, Telangana improving from tenth to ninth, and Haryana entering the top ten with Rs 25,794.03 crore, displacing Tamil Nadu from the top 10 list.
Outlook
The slowdown in private sector investments during Q3 of FY25 reflects cautious sentiment among businesses, influenced by inflation, falling domestic demand, rising input costs, and geopolitical uncertainties. Nevertheless, the outlook for FY26 remains positive, with anticipated policy measures and economic recovery expected to stimulate Private sector growth. Initiatives like the PLI 2.0 scheme for key sectors and the expected investor-friendly measures by the Central government in its upcoming Union Budget will boost the confidence of both domestic and foreign project promoters.
Continued government expenditure in core sectors such as transportation and social infrastructure will remain critical for economic stability and private sector growth. Over time, easing inflationary pressures, increase in Agricultural income and supportive policies are expected to revitalise private capital expenditure, driving India’s economic expansion in the long term.
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