Investment conundrum

Economic uncertainty may delay private investment

The government has been pushing capital expenditure for quite some time to support the economy, more so after the pandemic severely affected activity. At a time when the overall economic activity appears weak, it makes sense for the government to push capital expenditure, which can not only help revive demand and create jobs but also build productive capacity to increase potential growth over the medium to long term. The government has been doing exactly this and hoping to crowd in private investment to sustain demand. However, the private-sector investment story has not panned out as desired and is a risk