Investment for growth

Encouraging private investment stays a challenge

India’s growth momentum in its boom years of the 2000s came essentially from private-sector investment. Globally, gross fixed capital formation (GFCF) averaged between 23 per cent and 27 per cent in the past five decades. Outsize growth performers, such as China, have stayed consistently above that average, peaking at 45 per cent in 2013. Even today, China’s GFCF remains above 40 per cent. India has consistently been above average in terms of its investment rate as well. Today, it hovers at 29-30 per cent, which is well below the peak rates of 36-37 per cent achieved in the 2000s. The