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Private sector investment in India is showing steady growth, supported by the government’s continued focus on capital expenditure, Economic Affairs Secretary Anuradha Thakur said. She noted that public capital expenditure has risen more than fivefold over the past decade, reaching INR 10.7 lakh crore in 2025-26, with the government budgeting INR 12.2 lakh crore for the current fiscal. Thakur said public investment is helping attract private investment, while greater access to finance, particularly for MSMEs, remains important. She also stressed the need for stronger capital mobilisation, innovation, research and development and greater industry-academia collaboration.
Private sector investment in India is showing steady and sustained growth, supported by the government's continued push for public capital expenditure, Economic Affairs Secretary Anuradha Thakur said on Friday.
Referring to a recent analysis, Thakur said private investment, which had shown early signs of recovery in the CII 2023 survey, is now moving at a steady and stable pace upwards.
Public capital expenditure has increased more than fivefold over the past decade, rising from INR 2 lakh crore in 2014-15 to INR 10.7 lakh crore in 2025-26. The government has budgeted INR 12.2 lakh crore for public capital expenditure in the current fiscal.
Thakur said various indicators, including project offtake and the number of stalled projects, point to improving investment activity. The number of stalled projects is reportedly at a decade low. She said continued public investment is helping attract private capital into the economy.
India's long-term growth, she said, will depend on how effectively public and private capital is deployed to build productive assets, globally competitive industries, quality jobs and new technologies. She also highlighted the need to improve access to finance, particularly for micro, small and medium enterprises, which remain an important part of the manufacturing sector.
On the global economy, Thakur said geopolitical tensions, energy market volatility, fragmented trade patterns and technological disruptions have created an uncertain environment.
Despite these challenges, India has remained a source of growth and stability, with the economy expanding at an average rate of around 7 per cent over the past three years while maintaining macroeconomic stability. Strong domestic demand has also supported the economy despite difficult global conditions.
Thakur said gross foreign direct investment reached a record high last year, but added that India needs to attract more foreign capital. She said the government is continuing policy-level engagement and needs to strengthen its outreach efforts.
On overseas direct investment, she said increasing investments by Indian companies abroad and the resulting outflow of foreign currency reflect the growing maturity of the country's private sector.
Thakur also called for wider and deeper mobilisation of capital, including more efficient channelisation of domestic savings into productive sectors. Household financial savings have become more diversified, with increasing participation in equity markets and mutual funds alongside traditional financial instruments.
She said innovation needs to become a key driver of India's long-term economic growth as knowledge and technology increasingly determine productivity rather than labour and capital accumulation alone. India has developed one of the world's largest startup ecosystems and has established strengths in information technology, pharmaceuticals, digital public infrastructure and several emerging technologies.
The next phase of development will require greater investment in research and development and stronger collaboration between universities and industry, she said. While public policy can create the right conditions, sustained productivity growth and technological progress will depend on private sector participation.
Private investment, she added, not only increases productive capacity but also supports research and development, technology adoption, modernisation of production processes and integration with global value chains. Capital formation and innovation therefore reinforce each other, with higher investment supporting innovation and innovation improving productivity and returns.
Source PTI
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