iifl-logo-icon 1

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

Gross Fixed Capital Formation increased y-o-y by 29.2% in June quarter

2 Sept 2022 , 02:39 PM

Despite the increase year over year in the first quarter of 2022—2023 (Q1FY23), investments as a proportion of GDP remain below the 30% threshold needed to set the economy on a path of continuous growth. In Q1 compared to Q1 of last year, gross fixed capital formation (GFCF) increased to 29.2%. However, it was lower than 31.7% in the first quarter of the 2019—20 pre—Covid era.

However, when we account for inflation, GFCF was 34.7% in Q1, which was greater than it was during the same time last year (32.8 %). Ajay Seth, secretary of the Department of Economic Affairs, said on Wednesday that it was also the most in Q1 in the previous ten years.

Since its sources of funding, including bank loans, external commercial borrowings, and stock markets, are not seen from a constant prices viewpoint, Bank of Baroda Chief Economist Madan Sabnavis stated it is preferable to look at GFCF as a proportion of GDP at the current prices.

From that standpoint, GFCF data revealed an improvement in investments in the nation in Q1 compared to the same time the prior year, perhaps boosted by government spending. It hasn't yet fully recovered to pre-Covid levels, though.

Government capital expenditures increased by 57% to Rs 1.75 trillion in the first quarter of the current fiscal year. Sabnavis wasn't quite certain, though, of private involvement in GFCF. He opposed comparing GFCF consecutively since fourth-quarter investments increased.

According to Sabnavis, GFCF is still less than 30% of GDP. According to the high growth phase from 2005—2006 to 2007—2008, GFCF must be over 30% in order to set the economy on a path of sustainable economic growth.

According to Sakshi Gupta, chief economist at HDFC Bank Treasury, GFCF at constant prices may be examined from a long-term perspective, however, the high figure of 34.7% is rather overstated given the low base. Government CAPEX figures demonstrate that investments have improved, but the rise is overblown, according to the expert.

Government capital expenditures would be delayed and resume in the second half of the current fiscal year, according to ICRA Chief Economist Aditi Nayar.

For feedback and suggestions, write to us at editorial@iifl.com

Related Tags

  • Economy & Policy
  • GDP
  • Indian economy
  • Indian investment
  • news
  • Top News
sidebar mobile


12 Apr 2024   |   01:37 PM
12 Apr 2024   |   10:20 AM
12 Apr 2024   |   10:16 AM
Read More
Knowledge Centerplus

Logo IIFL Customer Care Number
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

Knowledge Centerplus

Follow us on


2024, IIFL Securities Ltd. All Rights Reserved

  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.


Get better recommendations & make better investments

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp