Private Capex to Lead India's Growth by 2026 as Public Spend Peaks

• India's capital expenditure is set to shift from public-led to private-led by 2026, with government spending reaching its peak.
• Private sector capex, stagnant for years, will now focus on new-age sectors like renewable energy, healthcare, hospitality, and data centers.
• Key growth areas include data centers (1.5 GW to 14 GW by 2035), drone production ($4.2 billion by 2025 with 'Drone Shakti' incentive), and defence manufacturing (target Rs 3 lakh crore production by 2029).
• Economists like Anitha Rangan and DK Srivastava highlight factors supporting private capex, including FDIs, low crude prices, easing global supply, and free trade agreements.
• While public capex was frontloaded in H1 FY26, private capex is expected to grow significantly, with listed companies' capex projected at Rs 8 lakh crore in FY26.

Why It Matters: India's economic growth will increasingly rely on private sector capital expenditure from 2026 onwards.