And now the inevitable pickup in investments

A 7 per cent GDP growth rate may be lower than what India aspires for, but over a five-year horizon this means 40 per cent higher demand

After a long period of weakness, investment activity in the Indian economy has been picking up. Gross Fixed Capital Formation (GFCF) as reported by the Central Statistics Office (CSO) remains the most broad-based estimate of this activity in India: The GFCF-to-GDP ratio fell steadily from 2012 to 2017 from 40 per cent to 30 per cent, but has since risen to 32 per cent. Many expect this recovery to be short-lived, but a deep dive suggests it could sustain, and reveals some surprises. As we will see, contrary to consensus views, the slowdown in investments till 2017 was not driven