Private corporate investment must flicker back to form

For a country slated to contribute about 20% to global growth (IMF), one would expect India to be abuzz with private enterprises placing bold bets on its future.

- SHAURYA DOVAL & SAKSHI ABROL

Instead, the numbers speak otherwise: public capital expenditure does the heavy lifting while private investments remain muted.

Over the past decade, India’s investment mix has seen ups and downs. Public investment, especially in infrastructure, transport and energy, has risen to a quarter of gross fixed capital formation (GFCF); private investment accounts for the rest of this total, but the share of private corporate investment has been in decline. It has fallen from a peak of 41% in 2015-16 to a current 33%. Household investments are important too.

Numbers alone hardly tell the full story.

For every stalled factory floor, there’s a startup in Bengaluru rewriting the rules of global technology. For every corporate balance sheet weighed down by old debt, there's a renewable energy project securing world-class financing. The story of private investment, then, is not just one of gaps, but of potential waiting to be unlocked. Which is why the conversation must move beyond asking, ‘Why isn’t capital flowing in?’ Instead, we should ask, ‘Where should capital flow for maximum gain?”