Despite publicly defending the strong real GDP growth rates, policymakers in India continue to act as if the economy is actually much weaker. Weak investments into the economy by private businesses has been the key area of concern for policymakers for over a decade, and despite several policy incentives by the Narendra Modi government, the situation still presents a challenge.

What is the nature of the problem?

India’s GDP is calculated by adding up all the expenditures in the economy. The biggest chunk — which accounts for 60% of India’s GDP — comes from the money Indians spend in their individual capacity.

The second biggest engine of GDP is the money spent towards increasing the productive capacity of the economy. Think of private businesses building new factories and buying new mach

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