India Inc. Remains A Cautious Investor

Private companies are not going full throttle to expand capacities despite deleveraged balance sheets, higher profitability and a healthy banking system ready to back their ambitions.

- ASHUTOSH KUMAR

DURING AN EVENT in New Delhi on September 13, finance minister Nirmala Sitharaman took a leaf out of Ramayana to understand the reasons behind subdued private sector investments despite steep corporate tax cut, sharp rise in public capital expenditure, simplification of GST (goods and services tax) and Atma Nirbhar Bharat Scheme. She referred to the episode where Lord Hanuman stares at the sea in Rameshwaram and doubts his ability to cross it and reach Lanka. It's only after he is reminded of his indomitable strength that he is able to take off on his mission to find Maa Sita.

Likening India Inc.'s inhibition to invest to Lord Hanuman's doubts before taking the leap of faith, Sitharaman said, "Is it, like Hanuman, you do not believe in your capacity, in your own strength, and there has got to be somebody standing next and say, hey, you are Hanuman, do it'. And who is that person to tell Hanuman? That certainly cannot be the government." Sitharaman sought to know what industry was hesitant about. "I want to hear what is stopping you?" she said, referring to the series of steps taken by central government to encourage companies to invest.