Business

India’s Private Sector Poised For Stronger Investments, Says Crisil Report

India’s private sector is now in a much stronger position to invest compared to a decade ago, thanks to improvements in the financial health of corporations, a report by Crisil Intelligence reveals.

Private companies have significantly reduced their debt and strengthened their balance sheets, giving them the flexibility to undertake new investments.

Private companies in India have made significant strides in improving their financial health over the years.

The reduction in debt, coupled with lower capital expenditure (capex), government-led infrastructure initiatives, and fresh equity issuances, has allowed businesses to improve their balance sheets. As a result, many companies have used profits to pay off existing debt.

The debt-to-net-worth ratio has dropped substantially, falling from 1.05 times in FY2015 to an estimated 0.50 times in FY2025.

This improvement means that companies now have ample room to take on new debt for expansion and growth.

Government Policies Boost Investment Climate

Government policies have played a crucial role in improving the investment climate.

Key initiatives, such as the Production-Linked Incentive (PLI) scheme, Make in India, liberalized foreign direct investment (FDI) policies, corporate tax reductions, infrastructure development, Goods and Services Tax (GST), and digital public infrastructure, have created a more favorable environment for private sector investment.

While private consumption in India grew at a slower rate of 5.6% in FY2024 due to weak rural demand, it is expected to recover to 7.6% in FY2025.

This recovery is largely driven by improved rural demand, supported by higher agricultural incomes and lower inflation. However, urban demand has been impacted by higher interest rates and stricter lending conditions for unsecured loans.

Government Measures To Support Investment In Private Sector

The Indian government is taking proactive measures to boost domestic demand and create a favorable investment environment.

Tax benefits introduced in the budget for the middle class are expected to strengthen domestic consumption over time.

Moreover, lower interest rates and controlled inflation are anticipated to enhance consumer purchasing power and, in turn, stimulate demand.

However, geopolitical developments and global tariff actions may continue to create caution among private companies about making large investments shortly.

Despite these challenges, India’s improved financial landscape and supportive government policies are expected to gradually increase corporate investments in the coming years.

ALSO READ: Electric Vehicle Incentives Under FAME India Scheme Reach 16.15 Lakh: Government

Purnima Mishra

Recent Posts

US President Trump Threatens Additional Tariffs On Russian Oil, Expresses Frustration With Russian President Putin

US President Donald Trump has expressed his frustration with Russian President Vladimir Putin, warning that…

21 mins ago

PM Modi To Inaugurate Kashmir’s First Vande Bharat Express On April 19

PM Narendra Modi will inaugurate the Jammu-Srinagar Vande Bharat Express on April 19 from Katra,…

46 mins ago

Productivity Hacks That Will Change Your Life

Master productivity with time-blocking, digital detox, and focus hacks to boost efficiency and control your…

55 mins ago

AFSPA extended In Manipur, Parts Of Nagaland, Arunachal For Another 6 months

The Ministry of Home Affairs (MHA) on Sunday extended the Armed Forces (Special Powers) Act…

13 hours ago

‘Manthan 2025’ Conference Concludes With Insights On National Unity And Cultural Heritage

The two-day national conference ‘Manthan 2025’ concluded successfully at North Campus, Delhi University, bringing together…

14 hours ago

Nitish Kumar Admits ‘Mistakes’ Of Leaving NDA, Vows To Stay Loyal

Bihar Chief Minister Nitish Kumar on Sunday publicly admitted that he made “mistakes” by leaving…

16 hours ago