Greenfield hopes: On rebound of investments past pre-pandemic levels – The Hindu

(This column first appeared in The Hindu on October 19, 2021)

  • The ebbing of the second wave of the pandemic, accompanied by the gradual lifting of restrictions across States, have not only spurred an improvement in several economic indicators but also led to a much-awaited investment revival. Data from investment monitoring firm Projects Today reveal that investment commitments and indicators of actual capital expenditure on the ground recorded a more than robust sequential growth in the July-September quarter after an insipid Q1. Even though enhanced central government infrastructure spending is partly responsible, this uptick is surprising for another reason — the first half of 2021-22 has now seen fresh investments higher than the pre-COVID year of 2019-20, with private capital outlays up nearly 49% to ₹4.87-lakh crore. Whether or not this growth rate is sustained, the implementation of the “PLI” scheme to promote manufacturing investments in India is expected to spur more investments in textiles, pharma, electronics over the second half of this year and 2022-23. Critics may call it a retro-style import substitution push, but if it manages to nudge a few investments away from Vietnam, Cambodia and now, Bangladesh, at a time the world is looking to reduce its China dependence, this is worth the effort. Initial evidence suggests some investors have been converted…

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