Create a sovereign wealth fund for strategic sectors

The recent slowdown in private investment was due to global uncertainties and geopolitical issues, but these investments will pick up as soon as the dust settles, feels the Confederation of Indian Industry president Rajiv Memani.

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The government should consider monetising a portion of its ₹50 lakh crore holding in listed companies to create a sovereign wealth fund to catalyse MSMEs or strategic sectors, including critical minerals, for greater economic benefits for the country, he told Prasanta Sahu in an interview. Edited excerpts.

Why is the private sector not investing?

The private sector investment from FY23 onwards has been on the upswing. In the last 4-5 months, the number of new announcements has slowed down a little bit. I feel this is largely related to global events, external uncertainty, and, to some extent, because of demand not picking up to the extent anticipated, especially urban demand. But that's a short-term issue. I think it should pick up again.

The private sector balance sheets are very strong. Companies understand that to create market capitalisation, you need growth. For growth, you have to have capex. So, all those things are completely lined up. There has been some domestic consolidation, but not that much. So, a bias towards capex, and that will happen. The execution plan sometimes takes more time, and largely those issues are at the state level. Availability of manpower is also an issue.

Bank credit growth is slowing. Do you see a revival?