Has the investment cycle of our economy finally turned up?
- There are some signs of private investment picking up and next year’s momentum will be crucial.
A question asked often is whether or not private sector investment is on track. The answer at best is a shoulder shrug, as the signals available differ. It is usually argued that when the government spends big on infrastructure, it crowds in private investment. Construction means more business for sectors like steel, cement, capital goods, etc, thus leading to a virtuous circle of economic activity. This explanation has been advanced for over five years, but there is still no straight answer, as we still await a private-investment pick-up. How can one form an informed judgement on this aspect of India’s economy?