India: Why are private firms not investing despite record profits?


 What will it take for India's private companies to begin investing in building new factories and firms?

It's a question that's confounded policymakers for years. As a share of gross domestic product (GDP), private investment in India has been on the decline since the global financial crisis of 2007, even while the overall economy clocked world-beating growth rates.

After a long hiatus, the investment rate picked up slightly in 2022 and 2023, but latest data from a leading ratings agency shows private sector expenditure as part of the overall investments in India's economy dipped again to a decadal low of 33% this financial year.

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