Former RBI Deputy Governor has emphasized that India Inc needs to significantly scale up investments if the country is to achieve the desired 8% growth trajectory. While India’s growth outlook remains robust, driven by consumption and government-led infrastructure spending, private sector investment has lagged, creating risks for sustaining high growth in the long run.
The call comes as India navigates global headwinds, trade shocks, and domestic structural challenges that demand a stronger push from corporate balance sheets.
Investment as the Missing Growth Pillar
Despite strong government spending on infrastructure and reforms under GST 2.0, PLI schemes, and green energy policies, private sector capital expenditure has not picked up at the required pace.
The former RBI official noted that:
Corporate investments must complement public capex to sustain growth momentum.
Higher private capex is vital for job creation, productivity, and export competitiveness.
Delays in scaling investment could stall India’s long-term growth potential.
Why 8% Growth Needs Private Participation
India has the demographic advantage and demand momentum, but achieving an 8% growth rate sustainably requires the private sector to:
Expand capacity in manufacturing, services, and technology.
Accelerate innovation and R&D to move up the value chain.
Invest in export-oriented sectors to balance trade shocks and tariffs.
Without a stronger private sector push, the growth story risks being overly reliant on consumption and government support.
Policy and Industry Implications
Policymakers are likely to continue incentivizing private investment through:
Ease of Doing Business reforms and tax simplification.
Expanding credit availability via banks and NBFCs.
Encouraging corporate participation in strategic areas like renewable energy, digital infrastructure, and supply chains.
Industry leaders are also urged to move from cautious post-pandemic spending to more forward-looking capex strategies.
Why This Matters
For Businesses: Highlights the urgency of reinvesting profits into growth and innovation.
For Policymakers: Reinforces the need to sustain reforms and crowd-in private capital.
For Citizens: Stronger private investment means more jobs, higher wages, and long-term economic resilience.
India’s ambition to reach 8% growth and beyond hinges on whether India Inc rises to the challenge of scaling its investments.
