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Chief Economic Advisor (CEA) V Anantha Nageswaran has said that private sector investment has been improving after Covid-19 and it is expected to further pick up in the coming months. He also said there was a small slump during the Covid times, however, there is a possibility that they can invest more in machinery and equipment and also in intellectual property products. He said those investments have also begun to rise in the last two years, but there is scope to do more because those are the ones that create quality jobs. 

Nageswaran stated that the private sector investment is not restricted to only cement and steel in fact data suggest there are many sectors witnessing private sector capital formation. Gross Fixed Capital Formation (GFCF) continues to emerge as an important driver of growth, as indicated in its rising share of nominal GDP. He added that India is in the midst of a private capex upcycle that has been aided by government capital expenditure.

He further said post-Covid, the government’s thrust on capex has been a critical driver of economic growth amidst an uncertain and challenging global environment. The focus of capex has been broad-based. Spending in sectors such as road transport and highways, railways, defence services, and telecommunications delivers higher and longer impetuses to growth by addressing logistical bottlenecks and expanding productive capacities. Government capex has also begun to crowd in private investment.