India’s disciplined fiscal management through a period marked by geopolitical conflicts, trade disruptions, volatile energy markets and climate-related shocks has begun paying dividends, with private investment showing signs of a sustained recovery, Department of Economic Affairs (DEA) secretary Anuradha Thakur said on Friday.
Speaking at the NCAER India Policy Forum 2026, Thakur said India has managed to preserve macroeconomic stability while maintaining an average economic growth of around 7% over the past three years despite an increasingly uncertain global environment.
“The world economy is navigating a period of extraordinary uncertainty,” she said, pointing to geopolitical tensions, fragmented trade patterns, technological disruptions and weather-related risks. “What was once considered temporary uncertainty is increasingly becoming a structural feature of the world economy.”
Against this backdrop, she said, India has emerged as a destination offering growth, policy stability and predictability, factors increasingly valued by global investors alongside financial returns.
Thakur attributed this resilience to prudent fiscal management and sustained public investment, while stressing that the next phase of India’s growth would require deeper fiscal consolidation, stronger participation by states, and reforms to mobilise larger pools of private capital.
She said the Union government’s sharp increase in capital expenditure over the past decade—from about ₹2 trillion in 2014-15 to ₹10.7 trillion in 2025-26 before being stepped up further to ₹12 trillion—has played a catalytic role by crowding in private investment, particularly in transport, logistics, energy and digital infrastructure.
Private investment gathers momentum
According to Thakur, early evidence now suggests that the strategy is beginning to yield results. Citing recent industry feedback from the Confederation of Indian Industry (CII), she said private investment, which had shown only “green shoots” in earlier surveys, is now moving on a “steady and stable” upward trajectory. Indicators such as project off-take have improved, while stalled projects have declined to a decade low, suggesting that the government’s public investment push and macroeconomic stability are encouraging businesses to commit fresh capital.
She also cited the statistics ministry’s forward-looking survey, which estimates annual private capital expenditure intentions at around ₹6.1 trillion. Separately, data from the Centre for Monitoring Indian Economy (CMIE) shows private-sector project announcements averaged nearly ₹34.8 trillion between 2024 and 2026, accounting for 71% of all new investment announcements.
To sustain the momentum, Thakur said India is broadening its capital mobilisation strategy through a combination of financial market reforms and targeted policy interventions. She highlighted the proposed Infrastructure Risk Guarantee Fund announced in the Union budget to ease financing constraints during the initial stages of large infrastructure projects. The government is also working on reforms to improve liquidity in the corporate bond market, strengthen market-making mechanisms and facilitate asset recycling to deepen domestic capital markets.
Improving credit access for micro, small and medium enterprises (MSMEs) remains another priority, she said. Digital public infrastructure such as the Account Aggregator framework, the Unified Lending Interface and the Trade Receivables Discounting System (TReDS) are helping improve capital allocation by making credit more accessible to smaller businesses and first-generation entrepreneurs.
Policy push targets long-term growth
Beyond financing reforms, Thakur outlined a broader policy architecture aimed at stimulating industrial dynamism and innovation. Besides the production-linked incentive (PLI) scheme, she said the government has increasingly used dedicated funds such as the National Investment and Infrastructure Fund (NIIF), the SWAMIH Fund for stressed housing projects and the Research, Development and Innovation Fund to channel equity support into priority sectors and crowd in private investment.
She also pointed to industrial cluster-based initiatives, including PM MITRA textile parks and the recently announced scheme to develop 100 industrial parks, saying such integrated manufacturing ecosystems can provide common infrastructure, simplified regulatory systems and large land parcels needed for globally competitive manufacturing.
Thakur said India’s long-term competitiveness will ultimately depend on how effectively public policy enables private enterprises to invest, innovate and scale. “Capital formation and innovation are mutually reinforcing,” she said, adding that while the government can create an enabling framework, sustained productivity growth and technological leadership will increasingly be driven by private-sector investment backed by a stable macroeconomic environment.