Among them, rising policy uncertainty and subdued
business confidence, delayed project approvals and implementation, and supply bottlenecks are
prominent (see IMF 2013). Higher real interest rates have played only a minor role in the current
investment slowdown (RBI, 2013; IMF 2013). In addition, Tokuoka (2012) finds that high and volatile
inflation and heightened global uncertainty may have contributed significantly to the slowdown in
corporate investment. While monetary easing since the GFC supported corporate investment, the
monetary tightening since early 2010 may have hurt corporate investment only marginally. Looking at
the determinants of the decline in corporate investment since the GFC in India, Tokuoka (2012) finds that
structural factors, in particular, the business environment, have played an important role in explaining
corporate investment activity.