Key Points
She couched it as asking them to invest in particular areas like urban infrastructure and to support Indias Sustainable Development Goals, but the overall unsaid appeal was that the private sector needs to increase investments overall...
In late 2022, Sitharaman seemed to lose patience and bluntly asked industry leaders why they were not investing, despite corporate tax rates being cut, production-linked incentives being brought in, and the government defending the private sector at every turn...
In an interview with ThePrint, former chief economic advisor Arvind Subramanian who spends large parts of his time shuttling between India and the US pointed out that many investors in India and from abroad are wary of the governments arbitrary actions, and that regulatory favours to a few corporate houses have created the impression that the playing field is not quite level..
Smaller investors dont want to enter sectors where Indias big corporate players are dominant, not for fear of market forces, but for fear of non-market ones...
This silence likely due to fear of government retaliation not only hurts these companies by keeping them below potential, but also effectively renders a vital engine of Indias growth severely underpowered...
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