| While Prime Minister Manmohan Singh has painted India Inc in somewhat unflattering colours with his comments on excessive CEO compensation, what he didn't talk about was India Inc's role in the country's capital formation. With corporate India doing its best to cut costs, profits for all listed companies (according to JM Morgan Stanley) have shot up from just 2 per cent of GDP in 2000 to around 6 per cent today "� so even if India Inc is paying itself too much, there can be little doubt about its contribution. This sharp surge in profitability has led to an equally huge hike in investment levels "� this shot up from Rs 30,000 crore at the turn of the century to an estimated Rs 165,000 crore in 2007-08. As a proportion of GDP, India Inc's investment has shot up from 1.5 per cent to 3.5 per cent. Apart from the fact that this is a very impressive growth, this means in 2007-08, India Inc's investment will account for between a tenth and an eleventh of the country's total investment "� in terms of the incremental investment, the share will be even higher. |
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