Private Sector Should Do More

Reluctant to shoulder the responsibility of taking the Indian economy forward, private enterprises in the country are evading their duty by offering slew of excuses starting from the ongoing tariff war with the United States (US) to prevailing global uncertainties in support of their risk aversion act. Infuriated by their attempt to play the victim card, Union Finance Minister Nirmala Sitharaman recently lambasted the private sector in a business meet, accusing them of not responding positively to government’s efforts to stimulate investment by increasing public spending and adopting encouraging policies to help the industry. Sitharaman’s outbursts was on the expected lines as the country has seen very little investment from the private sector since 2019, although India’s economic progress during the period was impressive, that too after being hamstrung by COVID-19 pandemic and the ongoing Russia-Ukraine war. The private sector’s lackadaisical approach sends out a message to the rest of the world that it is not conducive to invest in India. Such apathy is shocking. By sitting on profits without making noticeable investment, Indian companies have failed to contribute to economic growth of the country. With US President Donald Trump having issued notice for an additional 25 per cent tariff on imports from India for buying oil from Russia, not long after announcing a 25 per cent tariff (taking the total tariff to 50 per cent), a more proactive role is expected from big shot industrialists and small business owners alike to thwart the attempt to derail the Indian economy.

It is high time the private sector amends its ways and start investing in the country amid easing of the Goods and Services Tax (GST) rates, coinciding the with the upcoming festive season and winter holidays. Even as the Indo-US trade talks are on in an attempt to sort out tariff issues amicably and bring bilateral trade back on the track, while the BRICS countries have extended support to India in wake of the US’ unilateral tariff hike, which is a positive development, what the private sector can do is work in tandem with the government and make the country a favourite destination for investors. As per a survey, the private sector capital expenditure (CAPEX) in India is projected to decline in 2025-26 financial year due to high borrowing costs, geopolitical uncertainties and US trade tariffs. This is not an encouraging sign. Now, the big question is whether the private sector, which is a dominant force in the Indian economy, will rise to the occasion by boosting investment or play the waiting game and evade its responsibilities. The private sector must take further action, as the country’s economic outlook appears bleak amid slowing economy and challenges posed by trade disruption.