Our long capex wait | Mint

Finance Minister Nirmala Sitharaman on Tuesday asked Indian manufacturers why they weren’t investing, even though the government had extended a corporate tax cut, production-linked incentives (PLI) and other benefits. “Since 2019,” she said, “…I have been hearing industry doesn’t think [the environment] is conducive. Alright, the tax rate was brought down. Give PLI? We have given PLI. I want to hear from India Inc.; what’s stopping you?” Her question reflects frustration over India’s slow revival in private investment after a prolonged slump. It has hamstrung economic growth and burdened the Centre with the task of ploughing in money to get engines firing. The idea is to spur growth and “crowd in” private capital spending. Yet, while excess capacity has lessened in many sectors, private sector activity has not stepped up quite as expected. Consumer demand was scarred by the pandemic but has been picking up as the economy emerges from its adversities. Bank credit, though still uneven, has also shown signs of vibrancy. India Inc.’s animal spirits, however, appear rather concentrated at the top of the league. And this isn’t easy for anyone to explain.