Is Slowing Private Investment Drifting India away from Potential Growth?
Private investment plays an integral role in determining a country’s economic performance. Investment injects the necessary capital into the economy, thereby spurring economic activity, creating new jobs, boosting exports, and hence strengthening an economy’s GDP. COVID-19 pandemic had slowed down the inflow of private investment in India, largely driven by reduced consumer demand. Now, with the revival of consumer demand, an equivalent private investment revival is also expected. But is this happening? Source: iStock Let’s look at some statistics Private investments not rising as per expectations Private consumption rose from 55.5 per cent of GDP in Q1 of 2021-22 to 61.1 per cent in Q1 of 2022-23. The private investment during the same period, however, has risen only marginally - from 28.2 per cent of GDP in Q1 of 2021-22 to 29.2 per cent in Q1 of 2022-23. According to the IVCA-EY monthly PE/VC roundup, USD 3.3 billion of Private Equity/Venture Capital (PE/VC)investments