Making sense of sluggish private corporate capex
Measures to improve consumption demand and optimism in future growth will bring back private investment automatically
Measures to improve consumption demand and optimism in future growth will bring back private investment automatically
By the 2011-12 GDP series data, three growth engines (PFCE, GFCE and exports) are down and by the 2004-05 GDP series, all four (including GFCF) are down
Can use of high-frequency formal sector indicators – which don’t take into account informal sector – be the basis for upward revision of growth numbers by RBI.
Debt-fueled consumption marked by growing “unsecured” loans, high-frequency indicators limited to formal sector and government capex which is feeble don’t really add up.
In his post-budget webinar, PM Modi says there are immense possibilities for investment and innovation in agri-tech domains.
The total Capex outlay in the Union Budget 2023-24 has been enhanced by 33% from ₹7.5 lakh crore to ₹10 lakh crore, which takes it to an all-time high of 3% of GDP.
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.
The finance ministry expects consumption and demand to pick once the uncertainty and anxiety due to Covid-19 pandemic recedes.
Private investment is still weak and states are likely to spend more on healthcare than infrastructure, which leaves the ball in Centre's court.
On the private investment front, Gupta said that there is no dearth of capital in India for a good project backed by a good promoter.