Public investment led to strong GDP in H1 FY24: Raghuram Rajan

Former RBI governor and noted economist Raghuram Rajan, in his latest book ‘Breaking the Mould – Reimagining India’s Economic Future’ has raised questions on the medium-term growth of the Indian economy, specifically referring to slowing FDI inflows since 2021 and elusive private sector investment.

“When I was the governor, we kept worrying about the private sector investment. We used to keep pointing to the capacity utilisation numbers and would say it has not really gone up to the level where the private sector feels compelled to invest. But even today, those numbers have not picked up. Why is the private sector not investing in a big way? A lot of growth in the current quarter and the previous quarter is due to government investment. But how long will the government invest without breaking the budget?,” says Rajan, during an interaction on the content of the book.