Lok Sabha Question No. 445 (STARRED), answered on 2022-04-04
Subject: Investment Rate
Ministry: FINANCE
Asked by: Balubhau (Alias Suresh Narayan) Dhanorkar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## STARRED QUESTION NO. 445 TO BE ANSWERED ON 04.04.2022

## INVESTMENT RATE

## 445. SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is likely to achieve the objective of increasing the investment rate to 36 per cent of GDP by 2022-23 as per the report of Niti Aayog 'Strategy for New India';
- (b) if so, the details thereof and if not, the reasons therefor;
- (c) the annual growth of investment rate in India from 2014 to 2022, year-wise; and
- (d) the annual Gross Fixed Capital Formation from 2014 to 2022, year-wise?

## ANSWER

FINANCE MINISTER (SMT. NIRMALA SITHARAMAN)

- (a) to (d): A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO THE LOK SABHA STARRED QUESTION NO. 445 ON 'INVESTMENT RATE' BY SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR DUE FOR ANSWER ON 04.04.2022.

(a)  and  (b):  The  report  of  Niti  Aayog  'Strategy  for  New  India'  was  released  in  November  2018. Since January, 2020, India and rest of the world have been enduring once-in-a-century pandemic with  Governments  trying  to  contain  and  minimise  the  loss  of  economic  output.  Government  of India,  through  astute  management  of  the  pandemic  and  a  series  of  reforms,  contained  the contraction of GDP in 2020-21 to 6.6 per cent before enabling a growth of 8.9 per cent in 2021-22 to  make  a  full  recovery.  The  recovery,  among  other  initiatives,  was  aided  by  a  34.5  per  cent increase  in  the  capital  budget  of  Government  of  India  in  2021-22,  Production  Linked  Incentive (PLI)  and  Mega  Investment  Textiles  Parks  (MITRA)  schemes,  and  expansion  of  National Infrastructure Pipeline, that nudged the investment rate to rise from 27.3 per cent of GDP in 202021 to 31.2 per cent in 2021-22. Union Budget 2022-23 has provided further impetus to investment rate  for  taking  India's  economy  to  a  higher  growth  trajectory.  The  announcements,  inter  alia, include  greater  focus  on  PM  GatiShakti  to  ensure  inter-ministerial  coordination  in  infrastructure building  for  economic  transformation,  seamless  multimodal  connectivity,  logistics  efficiency; issuance of sovereign green bonds for mobilizing resources for green infrastructure and increase in outlay for capital expenditure. The outlay for capital expenditure increased from Rs. 5.54 lakh crore in 2021-22 to Rs. 7.50 lakh crore in 2022-23. It increases further to Rs.10.68 lakh crore, or 4.1  per  cent  of  GDP,  after  including  Grants-in-Aid  to  State  Governments  for  capital  works.  In addition, the outlay for 'Scheme for Financial Assistance to States for Capital Investment' has been enhanced  from  Rs.  10,000  crore  in  the  Budget  Estimates  to  Rs.  15,000  crore  in  the  Revised Estimates  for  2021-22  and  further  to  Rs.  One  lakh  crore  in  budget  2022-23.  The  capital expenditure  of  the  Union  and  State  Governments  will  increase  the  investment  rate  in  2022-23 beyond the level of 2021-22.

(c): The details  of  year-wise  investment  rate,  taken  as  the  share  of  Gross  Capital  Formation (GCF) in GDP, is as follows:

|                   |   Ratio of Gross Capital Formation (GCF) to GDP (current prices) (per cent) |
|-------------------|-----------------------------------------------------------------------------|
| 2013-14           |                                                                        33.8 |
| 2014-15           |                                                                        33.5 |
| 2015-16           |                                                                        32.1 |
| 2016-17           |                                                                        32   |
| 2017-18           |                                                                        33.9 |
| 2018-19 (3 rd RE) |                                                                        33.8 |
| 2019-20 (2 nd RE) |                                                                        30.7 |
| 2020-21 (1 st RE) |                                                                        27.3 |
| 2021-22 (2 nd AE) |                                                                        31.2 |

Source: NSO, MoSPI

(d): The details of year-wise Gross Fixed Capital Formation (GFCF) is as follows:

|                   |   Gross Fixed Capital Formation (current prices) (in Rs Lakh Crore) |
|-------------------|---------------------------------------------------------------------|
| 2013-14           |                                                                35.2 |
| 2014-15           |                                                                37.5 |
| 2015-16           |                                                                39.6 |
| 2016-17           |                                                                43.4 |
| 2017-18           |                                                                48.2 |
| 2018-19 (3 rd RE) |                                                                55.7 |
| 2019-20 (2 nd RE) |                                                                57.4 |
| 2020-21 (1 st RE) |                                                                52.6 |
| 2021-22 (2 nd AE) |                                                                67   |

Source: NSO, MoSPI