NEW DELHI : The growth in private investments in fixed assets cooled in 2022-23 after a rebound in the year before when it recovered from a pandemic-induced contraction, official data showed. Unless exports revive and wage growth fuels domestic consumption, private investments may not improve in the coming year either. Private investments in fixed assets rose 6.4% in real terms in 2022-23 to ₹19.7 trillion at 2011-12 prices, after a 16.4% growth in 2021-22.
The rebound in 2021-22 had come after a contraction of 8.4% in 2020-21, when the economy locked down after the covid outbreak. Data on investments—both private and public—forms an important component of the country’s gross domestic product (GDP) data, collectively called gross fixed capital formation (GFCF). While GFCF data is released every quarter, granular details on investments by specific types of institutions are only released annually, and 2022-23 is the latest year for which the data was released last week by the statistics ministry.
The data may be updated next year. Experts said an improvement in the external situation and a resultant boost in exports can lift private investments. Also, an improvement in real wages could boost consumption demand and as a result, capacity utilization in factories and private investments in the future.
“Private investment has not been restored fully to its earlier levels and that is the effect of net exports contributing negatively. The outlook for investments would improve on two conditions. One is that global conditions improve and our exports improve.
Second is that the government’s continued support for infrastructure etc., would start having a crowding-in effect," said D.K. Srivastava, chief policy adviser, EY. The
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