Datanomics: Higher investment needed to tread on 8% growth trajectory

India experienced its dream run of economic growth during 2003-10, barring 2008 when external shocks in the form of global financial crisis punctured India's high growth

India’s economy grew at a five-quarter high of 7.8 per cent in the first quarter of the financial year 2025-26 (Q1FY26). Meanwhile, the Standing Committee on Finance (2024-25), in its recent report, pitched for raising the investment rate to 35 per cent from the current 32.6 per cent to achieve a sustained growth path of 8 per cent per annum to realise the vision of ‘Viksit Bharat’ by 2047. In the case of India and China, two countries that started their development trajectory together, evidence shows a positive correlation between higher investment rates and strong real GDP growth.

 

China’s investment