Private capex to pick up, ₹4 lakh crore credit demand pipeline from India Inc: SBI Chairman

SBI Chairman expects private sector capital expenditure to increase with strong credit pipeline, government spending, and infrastructure financing.

SBI Chairman C.S. Setty has said the bank has already got ₹4 lakh crore strong credit pipeline from India Inc and expressed hope that capital expenditure by the private sector is expected to pick up in the second half of the fiscal year.

"We see a good amount of interest in private capital expenditure. The infrastructure financing, of course, is mainly coming from the roads, renewable energy, and some of the refineries," he told PTI in an interview.

As far as public spending is concerned, Finance Minister Nirmala Sitharaman in the Budget proposed to raise the capital expenditure target by 11.1% to record ₹11.11 lakh crore for 2024-25. This is 3.4% of the country's GDP.

Mr. Setty said some of the corporates had undertaken brownfield expansion for which the capital expenditure was funded by their own cash accruals and cash balances that they had.

However, he said, "We now see some of the corporates drawing the term loans for brownfield expansion too." "We have a pipeline, both in terms of sanctioned but not disbursed and a pipeline of proposals which are under process. This amounts to almost Rs 4 lakh crore, indicating that the corporate pipeline is strong," he said.

Stressing that the private capital expenditure definitely will pick up during the year, he said, there is renewed government expenditure after the first quarter slowdown due to general elections.

"We see in the second quarter, as well as in the second half of the current financial year, both capital expenditure will be spurred by the government expenditure as well as private expenditure," he said.