Increase private sector investment to maintain growth, Chief Economic Advisor’s advice to the industry

Combined investment by the Centre, States and PSUs grew 3.5 times in the last 10 years to Rs 21.2 lakh crore from Rs 6.8 lakh crore earlier

Private sector should increase investment to maintain growth

Chief Economic Advisor (CEA) V Ananth Nageswaran said on Friday that the private sector Investment There is a need to increase because continuing to invest at the same pace as in the last decade would probably not be good for the public sector. The combined investment of the Centre, States and Public Sector Undertakings increased 3.5 times in the last 10 years to Rs 21.2 lakh crore from Rs 6.8 lakh crore earlier. Speaking at industry body Confederation of Indian Industry’s (CII) Global Economic Policy Summit, Nageswaran said during the decade when companies and banks outside the financial sector were tidying up their balance sheets, PSUs took the lead and are expected to emerge in the second half of this century. Maintained economic growth during the decade. It continues in the current decade as well.

The Chief Economic Advisor in the Finance Ministry said that there is a need to decide whether to continue increasing investment at the same pace or to allow the private sector to act as the primary engine of capital formation in the economy. He said that at present the balance sheet and profit of the companies are very strong. Along with this, the books of banks and financial institutions have been fixed and they are ready to give loans. Nageswaran said, therefore, it would probably not be necessary or even better for public sector undertakings to continue investing at the same pace as has been done so far.

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He said, capital expenditure will increase continuously. But its speed will not be the same as in the last decade. The reason for this is that we do not want to reduce the resources for the private sector and at the same time ensure that the combined investment expenditure of the public and private sector should not increase the cost of capital for the economy too much. Earlier in September, Finance Minister Nirmala Sitharaman wanted to know from the industry that what is stopping them from investing in manufacturing. On the other hand, the confidence of foreign investors towards India has increased.