Page 37 - economic_survey_2021-2022

State of the Economy 11

Figure 17: IIP Consumer Durables Index Figure 18: RBI’s Consumer Confidence Index
160
2019 2020 2021 Current Situation Future Expectations
140 140
120 120

100
100
80
80
60
60
40
20 40
Jan/20 Mar/20 May/20 Jul/20 Sep/20 Nov/20 Jan/21 Mar/21 May/21 Jul/21 Sep/21 Nov/21
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Source: O/o Economic Advisor, DPIIT Source: RBI

Investment
1.13 Investment, as measured by Gross Fixed Capital Formation (GFCF) is expected to see
strong growth of 15 per cent in 2021-22 and achieve full recovery of pre-pandemic level.
Government’s policy thrust on quickening virtuous cycle of growth via capex and infrastructure
spending has increased capital formation in the economy lifting the investment to GDP ratio to
about 29.6 per cent in 2021-22, the highest in seven years (Figure 19).

Figure 19: Gross Fixed Capital Formation (GFCF)

16 35
14 GFCF GFCF share in GDP (RHS) 30
12 25
₹ lakh crore 8 6 20 per cent
10
15
4 10
2 5
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019-20 2020-21 2021-22

Source: NSO, MoSPI
Note: Absolute figures at constant (2011-12) prices, shares as per current prices

1.14 While private investment recovery is still at a nascent stage, there are many signals which
indicate that India is poised for stronger investment. The number of private investment projects
under implementation in manufacturing sector has been rising over the years (Figure 20).
Companies hitting record profits in recent quarters and mobilization of risk capital bode well for
acceleration in private investment (Figure 21). A sturdy and cleaned-up banking sector stands
ready to support private investment adequately. Expected increase in private consumption levels
will propel capacity utilisation, thereby fuelling private investment activity. RBI’s latest Industrial
Outlook Survey results indicate rising optimism of investors and expansion in production in the
upcoming quarters.