The baffling wait for ‘demand visibility’

All commentary on India’s economic situation is in agreement that private investment must perk up for gross domestic growth (GDP) growth to accelerate or even be maintained, and that there is only so much that a fiscally responsible government can do.

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Keeping aside investment for export businesses, which has its special set of challenges, such as cost competitiveness in manufacturing and the availability of high-end human talent for services, on the domestic business front, the refrain from economists for a while now has been that companies are not seeing the necessary “demand visibility” in order to invest.

What exactly is this “demand visibility” that companies are in search of and need to see before they can decide to put money behind any aspect of India’s domestic demand?

Corporate India’s public and private utterances show strong belief and confidence in India’s economy and domestic consumption story. Reports pointing to the runaway positive fundamentals of today and drivers of the future, on both economic and consumer indicators, are routinely put out by large public and private financial-market players, echoed and amplified by media majors, and affirmed by companies. There is enough validation from India analysts abroad that the country is indeed a very bright spot in the world, economically and politically speaking.