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The Reserve Bank of India (RBI) in its article has said that investment activity is gaining momentum and the envisaged capital expenditure is set to jump by over 80 per cent to Rs 1,71,568 crore in 2023-24 as against Rs 94,876 crore in 2022-23. It noted that improvement in capacity utilisation of the manufacturing sector, pick-up in credit demand and improving consumer sentiments are helping the capex cycle.

The article said in FY23, infrastructure -- including power, telecom, ports and airports, storage and water management, special economic zone, industrial, biotech, IT park, and roads and bridges -- remained the major sector accounting for 60 per cent of the total cost of projects. Apart from infrastructure, metal and metal products, construction, textile, and food products accounted for a sizeable share in the total cost of projects envisaged in FY23.

It said about 547 projects received assistance from banks and financial institutions during FY23 with a record project cost of Rs 2.66 lakh crore as compared to 401 projects having a total project cost of Rs 1.42 lakh crore in FY22. Of the total FY23 project cost, about 33 per cent (Rs 87,997 crore) was expected to be spent in FY23 itself while 34.7 per cent (Rs 92,539 crore) is likely to be spent in FY24 and another 24.8 per cent (Rs 66,071 crore) in the subsequent period. The article warned that higher cost of capital because of the rate hikes by central banks, including the RBI, geopolitical tensions-led global uncertainties and risk of a slowdown in major advanced economies, can hamper investment activities.