CII: CEA said- Government companies have invested a lot, now private sector needs to increase expenditure.

Finance Ministry’s Chief Economic Advisor (CEA) V Ananth Nageswaran said on Friday that the private sector needs to increase investment, as continuing to invest at the same pace as in the last decade would probably not be good for the public sector. The combined investment of the Centre, States and Public Sector Undertakings increased 3.5 times in the last 10 years to Rs 21.2 lakh crore. Earlier it was Rs 6.8 lakh crore.

Speaking at the Confederation of Indian Industry (CII) conference, Nageswaran said during the decade when non-financial companies and banks were cleaning up their balance sheets, PSUs took the lead. Also maintained economic growth during the second decade of this century. This situation continues in the current decade as well. He said that it needs to be decided whether to continue increasing the investment of government companies at the same pace or to allow the private sector to act as the ‘primary engine of capital formation’ in the economy.

Currently the balance sheet and profitability of the corporate is strong. The books of accounts of banks and financial institutions have been put in order. With this they are ready to give loans. That is why it would probably not be better for government companies to continue investing at the same pace as it has been done so far.