Economists say although the economy is picking up momentum, the pace is still slow. Inflation has been tamed — it has come down from about 10 percent two years ago to less than six per cent this year. India, a huge oil importer, has reaped windfall gains from falling crude prices.
But a push by the business-friendly Prime Minister Modi to turn India into an investment hub has had little impact. In September, at a meeting of the heads of India’s biggest industries, he urged them to take risks and invest, but so far, there are not many taking his advice.
Chief economist at ratings agency, Crisil in Mumbai, Dharmakirti Joshi, said that the “private sector is yet to open its purse strings. Most companies right now they are straddled with excess capacity. The utilization of capacities that they created in 2009 or 2010, 2011, is very low. Second reason is some of these companies in the private sector, have a huge debt burden which is only becoming worse.”