Private sector investment key for Viksit Bharat: DEA secretary

The ambitious 'Viksit Bharat' vision requires private sector investment to complement public expenditure, according to Economic Affairs Secretary Anuradha Thakur. At a conference of finance ministers and secretaries, Thakur noted that global recognition, such as sovereign rating upgrades, highlights India's growing economic strength and improving business climate.

However, Thakur emphasized that government budgets alone cannot meet the scale of transformation envisioned for Viksit Bharat, and private sector financing needs to play a critical role.

During the conference, N K Singh, chairman of the 15th Finance Commission, clarified that private capital should complement, not replace, government financing. Singh suggested that India should save more, mobilize private capital, and allocate investments more efficiently to sustain the 7-8% growth rate necessary for Viksit Bharat.

He also proposed state-wise assessments of debt sustainability, reflecting the varying growth rates, interest costs, revenue buoyancy, and committed expenditures among states. Singh warned that the 16th Finance Commission's debt trajectory to bring government debt down to 73.1% of GDP by FY31 is daunting, given the unfavorable geopolitical environment and exogenous shocks.

Kotak Mahindra Bank founder Uday Kotak also spoke at the event, urging India to address its high gold imports, which could reach $88-90 billion in FY27. Kotak proposed forming a committee to examine the issue and called for greater fiscal discipline, reforms to attract more capital, and improved manufacturing capabilities. He cautioned that changing global dynamics, such as the influence of global technology companies and major economic powers, pose challenges to national sovereignty and economic independence.