GDP is composed of consumption, private and government investment, savings and trade balance. India has been seeing sustained GDP growth, with high overall levels of investment. However, the level of private investment has remained low.
Trade balance has been low and steady as %age of GDP, savings have also been steady. Forex reserves are good. The GDP growth has been driven by consumption and government investment.
My questions are:
1. Why is the private sector reluctant to invest despite good macroeconomic conditions?
2. How is domestic consumption increasing if private investment is stagnant?
3. Why have the governments reforms and high levels of investment in infrastructure not spurred private investment?
Why has private investment remained stagnant in India ?
byu/VVG57 inAskEconomics
Posted by VVG57