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New Delhi: The <keyword id="20072894" type="General" weightage="20" keywordseo="rural-economy" source="keywords">Rural economy</keyword> of <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> has emerged as a significant driver of <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>, outpacing urban areas largely due to increased <keyword id="20155204" type="General" weightage="20" keywordseo="government-spending" source="keywords">government spending</keyword> in the recent quarters, highlighted a report by <keyword id="20548750" type="General" weightage="100" keywordseo="Anand-Rathi" source="keywords" meta.keywordsubtype="org" meta.entityname="Anand Rathi" meta.hostid="153" meta.entityid="Anand Rathi">Anand Rathi</keyword>, a financial service company. "<keyword id="20109648" type="General" weightage="20" keywordseo="rural-india" source="keywords">Rural India</keyword> continues to outpace urban areas in growth, largely due to a significant rise in government spending in rural regions in the last quarter," said the report. For the coming months, the report stated that the growth trend in the rural economy is expected to continue, although a moderation in growth may occur. It also added that the favourable monsoon conditions and improved sowing data are anticipated to sustain the upward trajectory in <keyword id="19931574" type="General" weightage="20" keywordseo="rural-demand" source="keywords">rural demand</keyword>, providing a buffer against potential economic uncertainties. "We expect this growth to moderate following the elections, favourable monsoon conditions and improved sowing data should sustain the upward trend in rural demand". The report also highlighted that the government's ambitious capital expenditure plans, amounting to Rs 11.1 trillion, are expected to stimulate infrastructure development, further enhancing rural economic prospects The rural economy plays a crucial role in the development of the country because a majority of the population still resides in rural areas. As per the Economic Survey of 2022-2023 around 65 per cent of India's population lived in rural areas in 2021. The report also highlighted that India stands out among emerging economies due to its strong GDP growth. Last year, India grew by more than 8 per cent, and the <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="153" meta.entityid="RBI">RBI</keyword> expects a 7.2 per cent growth rate for FY25. The financial outlook is positive, with efforts to cut the fiscal deficit to 4.5 per cent. The report also noted that India's credit rating may improve because of the strong tax revenue and a large dividend from the RBI which will lead to a lower fiscal deficit than expected. "The fiscal outlook appears promising, with continued focus on reducing the fiscal deficit toward the 4.5 per cent target. Strong tax collections and a substantial RBI dividend may enable the fiscal deficit to come in lower than expected, which could potentially lead to an improved sovereign rating" said the report.

Rural economy is driving India's growth, Govt capex in infra will stimulate it: Anand Rathi report

In response to higher-than-expected tax revenue and a record surplus transfer from the Reserve Bank of India (RBI), the Indian government is considering an 8-10% increase in <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> (capex) for the fiscal year 2025, according to Pantomath Group's quarterly report, "Market Kaleidoscope: Quarterly Market Insights." This adjustment could raise the capex from the previously allocated Rs 11.11 lakh crore, aiming to bolster infrastructure and economic growth. This fiscal boost comes as India reaches a historic financial milestone. The total market capitalization of all stocks listed on the Bombay Stock Exchange (<keyword id="19895774" type="General" weightage="20" keywordseo="BSE" source="keywords">BSE</keyword>) briefly surpassed $5 trillion for the first time, placing India among global giants such as the US, China, Japan, and Hong Kong. India's primary market is set for a dynamic period, with 55 companies planning to raise over Rs 68,000 crore through Initial Public Offerings (IPOs). The first half of FY2025 has already seen 35 mainboard IPOs, collectively raising around Rs 32,000 crore with an average subscription rate of 61 times. The Indian market maintained a positive outlook in the first quarter of FY2025, driven by strong Q4FY24 earnings, favorable economic data, and positive global cues. Despite early June volatility following the 2024 <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> election results, market sentiment improved with the BJP securing 272 seats and a total of 292 seats for the NDA with allied support. This political stability under Prime Minister Narendra Modi's leadership is expected to promote long-term economic growth, with a focus on infrastructure, electric mobility, startup support, power distribution, digital privacy, and healthcare initiatives. Corporate India's performance in the March quarter of FY2024 met expectations, showing double-digit growth in net profit and single-digit revenue increases. Non-lending companies experienced moderate operating margin expansion due to favorable commodity prices and cost controls. The peaking interest rates and continuity of <keyword id="19978691" type="General" weightage="20" keywordseo="government-policies" source="keywords">government policies</keyword> are anticipated to support healthy corporate growth in FY2025. <h2>Growth to continue</h2>The government's push for increased <keyword id="20068449" type="General" weightage="20" keywordseo="ethanol-production" source="keywords">ethanol production</keyword> targets a 20% blending by 2026, benefiting ethanol-heavy sugar companies and promoting biofuel goals. The real estate market is projected to grow significantly, requiring Rs 14 lakh crore in debt financing from 2024 to 2026. This growth will positively impact the banking and financial sectors. Major telecom operators have raised tariffs post-election, potentially improving sector financials and paving the way for sector re-rating. Major cement players are expanding through acquisitions, with an expected 6-7% compounded growth and market dominance by the top five players by March 2025. FMCG Companies expect recovery in rural business due to factors like a normal monsoon, robust crop yields, and government measures, maintaining robust rural demand. The potential roll-out of the FAME 3 Scheme to support <keyword id="19963112" type="General" weightage="20" keywordseo="electric-vehicle-sales" source="keywords">electric vehicle sales</keyword> is anticipated, with a budgetary allocation of around Rs 10,000 crore. Sectors such as auto, cement, defence, railways, consumer durables, energy, and banking are expected to outperform. Lagging sectors like IT and specialty chemicals offer value-buying opportunities at lower levels. The structural bull market for Indian equity is supported by strong domestic fundamentals and government reforms, with a positive medium- to long-term market outlook. Globally, the US market showed resilience, except for the Dow Jones. The Federal Reserve maintained interest rates at 5.25-5.50%, awaiting inflation to move towards the 2% target before considering rate cuts. The US GDP grew at 1.4% annually in Q1 2024, with mixed economic indicators highlighting both strengths and challenges. The Indian <keyword id="19926041" type="General" weightage="20" keywordseo="IPO-market" source="keywords">IPO market</keyword> has seen significant growth, with a surge in companies seeking to list shares and a rise in capital raised. The first half of 2025 saw strong retail investor participation, reflecting confidence in India's growth prospects. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited, said, "Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations." He further added. "We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors." With the Indian government's potential capex increase and the robust primary market activity, the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> is poised for sustained growth. The upcoming period is expected to see heightened market activity, further IPOs, and economic stability, creating a conducive environment for investment and development.

India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

<ul><li>Market watchers have been hoping that India might head to a <keyword id="1067776" type="General" weightage="20" keywordseo="capex-cycle" source="Orion">capex cycle</keyword> as seen in 2003-08.</li><li>While there are similarities, the global demand scenario is different, say economists.</li><li>In terms of announcements, most of them relate to airlines where the benefits flow to the manufacturers outside India. </li></ul>The Indian markets are hitting new highs every day and the government is hopeful that this will translate to a higher capital expenditure (capex) cycle starting soon. However, even as hopes build for a repeat of 2003-08, the early indicators are mixed, as per economists. “There have been affirmative statements made by several companies on investment in FY24 which is positive as it is premised on a recovery in consumption demand. The picture for the first quarter of the year is, however, quite expectedly mixed. Therefore the announcements are definitely not broad-based and are restricted to a handful of sectors,” say economists at Bank of Baroda. What’s common with 2003-08? Most experts say that levers are in place for a repeat for the 2003-2208 high capex phase, which was led by private investment. Tailwinds for a capex recovery are similar — like higher utilisation levels which are also expected to pick up in demand. Strong bank and corporate balance sheets, an infrastructure push by the Indian government in the form of highways, railways, rural infra, Jal Jeevan Mission and defence spending should augur well for this. Moreover, the Production Linked Incentive (PLI) is also another added positive for domestic manufacturing, in addition to the push for energy transition. The amplified need for data centres and China+1 strategy are providing a fertile ground for revival of the capex cycle, says India Strategy report by Prabhudas Liladher. “This is likely to be the first industrial led capex cycle after the 2003-08 cycle was led by power and infra,” says the Prabhudas Lilladher report. A Kotak Institutional Equities report agrees that the levers are in place but remains cautious, it believes that the space for a sustained pace of <keyword id="4875151" type="General" weightage="20" keywordseo="government-capex" source="Orion">government capex</keyword> is limited. “Private capex cycle would require visibility of long-term high demand growth (including global growth), which is still missing. For now, even as the long-term growth fundamentals remain strong, we remain cautious in calling out for a broad-based sustained capex cycle,” Kotak says. Without a global impetus and visibility of medium to long-term demand, the capex cycle over the next 5-7 years may be much narrower and slower than 2003-08, the report adds. Airlines invest, but where? As much as ₹5.96 lakh crore worth of investments have been announced for Q1FY24 – of which 74% share comes from the airlines sector. “Investments in this industry are unique in so far as it involves purchase of aeroplanes which are imported. Hence while it does add to the capital stock of the country it would not be generating backward linkages with other sectors and hence other related industries may not benefit much from such purchases. The boost is more for the global manufacturers of these aircrafts,” says Bank of Baroda. The share of power sector is 10%, and is from the conventional space. The chemicals sector has a share of 8% followed by machinery with 3% and the auto sector with 2%. ‘Optimism in the long-term’ Data from the funds raised in the corporate bond market also provides a clue into the mood of private investments. As per BoB data, the total amount of funds raised was impressive at ₹2.33 lakh crore as against ₹0.97 lakh crore in the last year. Here too, 89% of the funds mobilised was from the financial sector of which asset financing companies accounted for 72% – indicating limited fund raising by non-finance companies. “Therefore, the investment story looks blurred when looked at from the point of view of the debt market. There could be reasons to be optimistic of the future. However, in the short to medium term the heavy lifting has to be done by the government on investment,” say BoB economists.

India on the brink of witnessing a 2003-08 kind of capex push but challenges remain

<ul><li>Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> on Thursday presented the Interim Budget 2024-25.</li><li>This budget outlines expenditures and revenues till the formation of the next government.</li><li>Here are the top highlights and major announcements of the Interim Budget 2024-25.</li></ul> Finance Minister Nirmala Sitharaman while presenting the Interim Budget 2024-25 at <keyword id="19895397" type="General" weightage="20" keywordseo="parliament" source="keywords">Parliament</keyword> on Thursday, February 1 announced that the FY25 capex outlay has been increased by 11.1% to ₹11.11 lakh crore. The FY25 capex outlay is now at 3.4% of the GDP. Fiscal deficit, the gap between the government’s revenue and expenses, is expected to be 5.8% of gross domestic product, said the FM. “The gross market borrowing for the financial year ending March 2025 will be ₹14.3 lakh crore (less than the borrowing in the current financial year).” The FM began her speech by giving a summation of the Narendra Modi government's performance in the past ten years. "The Indian economy has witnessed positive transformation in the last 10 years. Our development steps have covered all elements of inclusivity," she said. This is the final budget of the second term of the Narendra Modi government before the country heads to elections later this summer. Sitharaman stressed on the government's aim to make India developed -- Viksit Bharat – by 2047. The government has tried to provide inclusive development and growth, both socially and geographically, she said in the opening minutes of her sixth budget speech as the country’s finance minister. It is to be noted that this Vote on Account or an Interim Budget is only for the next three months as the next government after the election will come out with a comprehensive budget for the financial year 2024-25 later. In other words, this budget outlines expenditures and revenues till the formation of the next government. Key announcements by Finance Minister Nirmala Sitharaman: <ol><li>No relief for taxpayers: Same tax slabs to continue, says FM. “I propose to retain the same tax rates for direct and indirect taxes.”</li><li>FY25 divestment target at ₹50,000 crore. The FY24 target has been curbed to ₹30,000 crore</li><li>Gross market borrowing for FY ending March 2025 will be ₹14.3 lakh crore.</li><li>FY25 capex outlay increased by 11.1% to ₹11.11 lakh crore. The FY25 capex outlay is now at 3.4% of GDP.</li><li>The revised estimate of the fiscal deficit is 5.8% of GDP. The FY25 fiscal deficit target is set at 5.1%.</li><li>The FY25 revenue deficit is set at 2% versus FY24 revised estimate of 2.8%</li><li>The FDI during 2014 to 2023 was $596 billion. India is negotiating bilateral treaties with foreign partners. FM adds that FDI is now “First Develop India”.</li><li>Three major economic railway corridors announced to boost GDP. This includes an energy mineral and cement corridor, port connectivity corridor and high traffic density corridor.</li><li>40,000 rail bogies to be converted to Vande Bharat standards. Airports have doubled to 149 in the last decade.</li><li>Boost for tourism: Projects for enhancing tourism revenue will be taken up, especially for islands, including Lakshawdeep.</li><li>FM says the government has assisted 25 crore people to escape from multidimensional poverty.</li><li>Free ration: Worries of food have been alleviated as 80 crore people are provided with ration.</li><li>Direct benefit of ₹34 lakh crore via Jan Dhan has led to savings of ₹2.7 lakh crore for the government.</li><li>The PM PM SVANidhi scheme has supported over 78 lakh vendors. Out of this, 2.3 lakh vendors have received loans more than two times.</li><li>11.8 crore farmers have been assisted under the PM Kisan Yojna.</li><li>₹30 crore Mudra loans have been given to women entrepreneurs in the last ten years.</li><li>Average real income of people has risen by 50%.</li><li>India-Middle East-Europe Economic corridor is a game changer for India and others.</li><li>Artisanal support: PM Vishwakarma Yojana provides end-to-end support to artisans and crafts people engaged in 18 trades.</li><li>GDP new definition: FM Sitharaman has said that the government is focussed on GDP (governance, development and performance)</li><li>Real estate boost: Government close to achieving the target of three crore houses under the PM Awas Yojana Grameen. Additional two crore houses to be built in five years.</li><li>Sustainability &amp; free electricity: Rooftop solarisation scheme announced to help one crore houses, enabling free electricity and selling of surplus energy. First three hundred units for solar homes.</li><li>Nari Shakti: FM says that female enrolment in higher education is up by 28% in 10 years in STEM courses. Free healthcare under Ayushman Bharat to be extended to Asha workers and Anganwadi workers.</li><li>Target for Lakhpati Didi scheme enhanced from 2 crore to 3 crore.</li></ol>

Interim Budget 2024: FY25 capex hiked 11%; no change in tax slab, says FM Sitharaman

India's corporate credit landscape is showing positive trends that are expected to persist, according to a recent report by <keyword id="19990557" type="General" weightage="20" keywordseo="SP-Global" source="keywords" meta.keywordsubtype="org" meta.entityname="S&amp;P Global" meta.hostid="261" meta.entityid="S&amp;P Global">S&amp;P Global</keyword>. The report highlights strengthening credit quality across various sectors, driven by enhanced <keyword id="20994126" type="General" weightage="20" keywordseo="financial-discipline" source="keywords">financial discipline</keyword>, broad-based <keyword id="19899597" type="General" weightage="20" keywordseo="earnings-growth" source="keywords">earnings growth</keyword>, and robust liquidity profiles. S&amp;P Global's analysis reveals that one in three ratings within India now shows a positive outlook, marking a significant shift after three years of net positive rating actions. The report indicates that corporate India has built greater resilience against downside risks, reflecting a more stable and robust credit environment. However, corporate leverage in India is expected to decline marginally, even as capital expenditure (capex) rises by 30% compared to pre-pandemic levels. This improvement is attributed to more entrenched financial discipline among companies, which have managed to balance rising capex with prudent financial management. The report forecasts a 10% growth in aggregate EBITDA in 2024, driven by strong performance in sectors such as telecommunications, airports, commodities, and chemicals. This broad-based earnings growth underscores the resilience of corporate India and its ability to generate substantial cash flows despite a challenging global environment. Indian companies are benefiting from strong onshore liquidity and the absence of large debt maturities, which support their liquidity profiles. The resilience of these companies to foreign exchange and interest rate volatility further strengthens their liquidity positions. Corporate India's positive credit trends are closely linked to broader economic drivers such as GDP growth. Increased consumer spending is bolstering sectors like airports, automobiles, and telecommunications. Meanwhile, infrastructure investment is significantly boosting the commodities, utilities, and commercial automotive sectors. S&amp;P Global notes that both infrastructure and non-infrastructure sectors are experiencing reductions in leverage, with absolute debt reduction more pronounced in non-infrastructure sectors. However, infrastructure entities are slower in reducing debt due to higher capex, particularly in energy transition initiatives. Operating cash flows across sectors are outpacing capex, supporting further deleveraging. While capex intensity remains higher in infrastructure sectors, the neutral free operating cash flow is seen as a positive trend, indicating that companies are managing their capital expenditures efficiently while maintaining cash flows. The transportation infrastructure sector is benefiting from traffic growth and tariff increases, with rising cargo volumes supporting port revenues and improved operating efficiencies boosting margins. Airports are also experiencing higher traffic levels and tariff increases, contributing to better operating cash flows and overall credit quality. In the utilities sector, rising demand and new capacity are driving earnings growth, though capex remains high, particularly for energy transition projects. The steel sector is expected to see increased operating cash flow due to falling input prices and new capacity additions. Earnings in the oil and gas sector are expected to remain stable, supported by a favorable price outlook and consistent production levels. The telecom sector is also on a path to significant deleveraging, with capex expected to moderate following the 5G auctions in 2023. The auto sector is witnessing sustained operating performance as volumes stabilize after the supply chain disruptions of 2022. S&amp;P Global notes that debt levels in the auto sector are expected to remain low following sharp deleveraging, while normalized growth in auto sales and stable margins support the sector's positive outlook. In the chemicals sector, falling input costs and stabilized product prices are expected to drive earnings recovery following a downturn in 2023. Improved signals show a broader trend of recovery across various industrial sectors in India. S&amp;P Global concludes that with the highest proportion of positive credit outlooks in the region, India's corporate sector is well-positioned for continued <keyword id="22758432" type="General" weightage="20" keywordseo="credit-quality-improvement" source="keywords">credit quality improvement</keyword>. 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You Searched For "capex india" and got 5 results

Rural economy is driving India's growth, Govt capex in infra will stimulate it: Anand Rathi report

ANI

India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

ANI

India on the brink of witnessing a 2003-08 kind of capex push but challenges remain

Katya Naidu

Interim Budget 2024: FY25 capex hiked 11%; no change in tax slab, says FM Sitharaman

Sourabh Jain

India's corporate credit quality is getting stronger: S&P Global

ANI

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