Is Gross Fixed Asset Addition in India Strongest During FY20-25?
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Synopsis
India's Gross Fixed Asset addition has reached unprecedented levels during FY20-25, according to a recent report. This surge, primarily fueled by construction materials and infrastructure projects, marks a significant recovery from previous downturns. Read on to learn how various sectors are contributing to this remarkable growth.
Key Takeaways
- GFA growth during FY20-25 reached an exceptional 2,802.32 percent.
- Construction materials and electricity generation led the growth.
- The metal sector has seen significant declines in recent years.
- Government initiatives like the Smart Cities Mission are crucial in driving growth.
- Past challenges included high costs and regulatory issues.
New Delhi, Nov 13 (NationPress) A recent report indicates that the addition of Gross Fixed Assets (GFA) during the financial years 2020 to 2025 (FY20-25) has been the most robust since the period of FY05-FY10.
Significant contributions came from sectors such as construction materials, electricity generation, and consumer goods. In contrast, the metals sector has experienced a decline in recent five-year spans.
The chemical industry has been expanding its capacity over the last two five-year periods, which is expected to drive growth following a recovery in demand, as per PL Capital's report.
The construction materials sector has shown considerable fluctuations in GFA growth throughout the past twenty years.
During FY05-10, GFA saw a remarkable increase of 233.71 percent, spurred by rapid urbanization, real estate growth, and infrastructure initiatives. However, growth slowed to 94.68 percent in FY10-15 due to project delays and a decrease in private investments.
A drastic decline of -94.59 percent occurred during FY15-20, attributed to high input costs, regulatory hurdles (RERA, GST), liquidity issues stemming from demonetization, and the NBFC funding crisis, which hampered housing and infrastructure projects.
In FY20-25, the sector has experienced a remarkable recovery, achieving an astonishing 2,802.32 percent growth, driven by unprecedented government capital expenditure, a revival in real estate, and extensive infrastructure initiatives like the Smart Cities Mission, Bharatmala, and PM Awas Yojana, according to the report.
In contrast, following growth rates of 172 percent in FY05-10 and 174 percent in FY10-15, the metals sector has faced a 5 percent decline in GFA during FY15-20 and a further 36 percent drop in FY20-25, influenced by low global prices, excess capacity, and high leverage.
The machinery sector has also experienced a consistent and marked decline in GFA growth over the last two decades, the report concludes.
Point of View
I believe this report underscores a pivotal moment for India's economy. The remarkable rebound in Gross Fixed Asset addition reflects not only government commitment but also the resilience of key sectors. It is crucial for stakeholders to recognize and support this growth trajectory as we move forward.
NationPress
14/11/2025
Frequently Asked Questions
What sectors contributed to the GFA growth in India?
The construction material, electricity generation, and consumer goods sectors were the primary contributors to the GFA growth during FY20-25.
What was the GFA growth rate during FY20-25?
The GFA growth rate during FY20-25 was an exceptional 2,802.32 percent.
How did the metals sector perform during this period?
The metals sector faced a decline of 36 percent in GFA during FY20-25 due to low global prices and excess capacity.
What challenges affected GFA growth in previous years?
Previous years were affected by high input costs, regulatory challenges, and liquidity stress from demonetization.
What is the significance of the Smart Cities Mission?
The Smart Cities Mission is part of a broader government initiative aimed at enhancing urban infrastructure and driving economic growth.
