Economic Survey 2021-22: Despite private investment recovery at a nascent stage, India is poised for stronger investment ahead

31 Jan 2022 , 02:57 PM

The Economic Survey 2021-22 that was announced today by the Finance Minister Nirmala Sitharaman said that India’s investment as measured by Gross Fixed Capital Formation (GFCF) is expected to see strong growth of 15% in 2021-22 and achieve full recovery of pre-pandemic level.

As per the Survey, while private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment. The number of private investment projects under implementation in the manufacturing sector has been rising over the years.

Notably, companies hitting record profits in recent quarters and mobilization of risk capital bode well for an acceleration in private investment.

“A sturdy and cleaned-up banking sector stands ready to support private investment adequately,” the Survey added, “Expected increase in private consumption levels will propel capacity utilisation, thereby fuelling private investment activity.”

The Survey highlighted that the government’s policy thrust on quickening virtuous cycle of growth via CAPEX and infrastructure spending has increased capital formation in the economy lifting the investment to GDP ratio to about 29.6 per cent in 2021-22, the highest in seven years.

It pointed out that RBI’s latest Industrial Outlook Survey results indicate rising optimism of investors and expansion in production in the upcoming quarters.