Private investments taking off; consumption growing: CII president Sanjiv Puri

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NEW DELHI : Private investments are taking off, and household consumption, which has crossed pre-pandemic levels, is growing, unlike in many countries, according to Sanjiv Puri, president of the Confederation of Indian Industry (CII) and chairman and managing director of consumer goods conglomerate ITC Ltd. Puri added that with global trade expected to do much better in 2024-25, India’s consumption and growth story will get further impetus. Quoting data from the ministry of statistics, Puri said investments in fixed assets like plant and machinery in nominal terms was at 23.8% of gross domestic product (GDP) in 2022-23 compared to 22.4% in the pre-pandemic year of 2019-20.

“It is in the right trajectory," Puri said. Gross fixed capital formation (GFCF) in current prices had grown from ₹57.2 trillion in 2019-20 to ₹91 trillion in 2023-24, according to the statistics ministry. Puri also pointed out that retained earnings of Indian companies have gone up over the past decade, which suggests that more of corporate profits are being ploughed back into operations and investments.

Quoting a CII analysis of corporate profitability data, Puri said retained profits of a panel of over 6,000 private sector firms have gone up from ₹0.23 trillion in 2014-15 to ₹1.17 trillion in 2021-22, and further to ₹1.18 trillion in 2022-23. Besides retained earnings, businesses also tap debt and equity markets to finance expansion. Puri said quoting a CII survey of businesses that capacity utilisation is now above 75% and that improved cross-border trade this year will aid consumption demand.

“Whatever production capacities were created all over the world in the pre-covid period also have to be absorbed. And there will always be a lag effect. But