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Private Investment The Missing Piece In The Indian Economy Story: RBI


Private investment is the missing piece in the story of the Indian economy in 2020-21; reviving it awaits an environment in which 'animal spirits' are rekindled and entrepreneurial energies are released so that backward and forward linkages and multipliers prepare the ground for a durable investment-driven recovery, the RBI has said in its latest annual report.


"Fiscal policy, with the largest capex budget ever and emphasis on doing business better, has swung into a crowding-in role. It is apposite now for Indian industry to pick up the gauntlet. The share of GFCF in aggregate GDP inched up to a six-quarter high at 33.0 per cent in Q3:2020-21, but in relation to its peak in 36.1 per cent in Q2:2008-09 there is some catch-up still. Within saving too, there is a compositional shift underway among institutional sectors, reflecting the normalisation of economic activity," the country's central bank has said in its annual report.

Private Investment The Missing Piece In The Indian Economy Story: RBI

At this juncture, therefore, the Indian economy is at a cusp, the RBI report states. "A virtuous combination of public and private investment can ignite a shift towards investment and thereby to a trajectory of sustained growth by exploiting the unique point at which the economy is poised - at the crossroads of regaining its place as the fastest growing economy in the world, the third largest in terms of purchasing power parity, with late dividends of demographic transition still accruing, and a strong external position," the RBI has said.

Read more about: rbi
Story first published: Thursday, May 27, 2021, 12:45 [IST]
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