Uncertainty Could Hit Pvt Sector Capital Formation

The prospect of protracted uncertainties in the global economic landscape not only pose a risk for India's growth outlook in 2025-26, but are also likely to dent the private sector's capital raising and investment plans, the finance ministry averred on Tuesday, cautioning the country's corporates that the era of 'easy pickings' was over.

- Ruchika Chitranvansi

"More than trade, the perception of prolonged uncertainty may cause the private sector to put its capital formation plans on hold. The private sector and policymakers must be mindful of this risk and act urgently to avoid making uncertainty feed upon itself. The domestic economy is large and capital formation can lead to a mutually reinforcing cycle of investment-income growth-demand growth-additional capacity creation," the ministry's monthly economic review for March noted.