1. Government Spending Takes off
Recent data shows the central government’s capital expenditure surged nearly 40% year-on-year in H1 of FY26 (April–September) across key ministries. Spending hit about ₹5.8 lakh crore in the first half, which is over 52% of the full-year budget estimate. This surge underpins the infrastructure push. Defense, Roads, Railways, Housing and Telecom are getting funding and attention.
Higher government capex is a catalyst. It boosts demand for materials, equipment, logistics, power and construction-capital goods.
2. Private Corporate Capex Showing Signs of Life
According to Neelkanth Mishra (Chief Economist at Axis Bank), “in the last three months… corporate capex is beginning to pick up”. Top 200 listed corporates’ capex is up 13% in H1 FY26. This reflects growing confidence in future demand, and in the ability of companies to invest ahead of the cycle.
This means opportunities in equipment-makers, industrials, and the supply chain of manufacturing-capex — not just purely government-driven play.
3. Credit & Banking Indicators Move Up
The Reserve Bank of India (RBI) data show that credit growth in the banking system rose to around 11.5% year-on-year as of the 17 October fortnight — an eight-month high.
Deposit growth, by contrast, was around 9.5% in the same period — creating a wider spread and indicating banks are finding demand for lending.
Increased credit growth signals that both corporate and consumer credit are active. This supports growth, investment and capital goods demand.
For investors, the combination of strong bank-credit growth, rising capex and large government spending points to a positive growth cycle rather than a one-off stimulus.
Why This Matters
The convergence of big government capex, reviving private investment, and rising credit growth suggests India is shifting gears. The engine of growth is moving from services and consumption into investment and credit.
With the government leading the way, private corporates following, and banks financing, the conditions for a sustained growth uptick are aligning.
