Indeed, the rapid build-out of infrastructure has not spurred the increase in private investment in the economy-at-large that many hoped for. It soared in the decade before Mr Modi came to power, but has since remained subdued in the face of policy missteps such as the demonetisation of large-denomination bank notes in 2016 and the messy roll out of a national goods and service tax. The covid-19 pandemic did further damage to confidence. Private investment in 2020 was only 22% of gdp, down from 31% in 2011. On March 7th Mr Modi, not for the first time, invited Indian Inc to step up, with a “call upon the private sector of the country to increase their investment just like the government”.
What is dissuading it? Beyond the perennial disincentives listed above, the rising cost of capital and uncertainty over demand are making investors wary. Businesspeople also whisper additional reasons for caution. Mr Modi’s government can be capricious. Its use of tax authorities to go after political foes has weakened faith in their impartiality. The independence of regulators cannot be taken for granted, mutters an influential figure at a major investor.