Business EconomyPosted at: Oct 4 2026 4:37PM


Private investment must lead India’s next growth cycle: Nirmala Sitharaman

New Delhi, Oct 4 (UNI) union Finance Minister Nirmala Sitharaman has called for a stronger role for private investment in India’s next phase of economic expansion, saying higher corporate capital expenditure and greater spending on research and development (R&D) will be crucial to sustaining growth amid rising global uncertainty.
Speaking at the Kautilya Economic Conclave organised by the Ministry of Finance, Sitharaman said the private sector would need to take the lead in investment, including in research and innovation.
“Private investment must now lead the cycle, including in research and innovation,” she said.
The Finance Minister pointed to the relatively low level of R&D spending in India as an area requiring greater attention. India’s expenditure on R&D is currently about 0.83 per cent of GDP, significantly below the 2.7 per cent average among Organisation for Economic Co-operation and Development (OECD) economies. The private sector contributes around 36 per cent of India’s overall R&D expenditure.
According to Sitharaman, expanding the overall pool of investment while increasing the contribution from private companies would be important for building India’s innovation capabilities.
The government has already sought to encourage private participation in research through the Rs 1 trillion Research, Development and Innovation (RDI) fund announced in the Interim Budget for 2024-25.
The initiative is aimed at promoting private-sector investment in emerging technologies and innovation and moving the economy beyond a manufacturing-led approach towards products and technologies developed in India.
Sitharaman said the economic environment ahead would remain uncertain and India would need to strengthen the resilience built over the past decade while preparing for new risks.
She said global uncertainty should now be treated as a persistent feature of the economic landscape rather than a temporary disruption. This, she added, would require policymakers to factor resilience into economic planning on an ongoing basis.
Strategic resource security, continued engagement with the global economy and development of skills will be among the key priorities, the Finance Minister said.
On critical resources, Sitharaman highlighted the risks of supply chains designed purely around cost efficiency. Such networks, she said, can leave economies vulnerable to disruptions.
India has therefore been pursuing initiatives such as the National Critical Mineral Mission, Rare Earth Corridors and India Semiconductor Mission 2.0. The country is also exploring the development of small modular reactors as part of its broader energy and strategic resource agenda.
At the same time, Sitharaman cautioned against allowing efforts to build economic resilience to result in excessive protectionism.
She said international economic relationships needed to remain open, predictable and based on established rules. Greater reliance on dialogue and negotiated agreements would be preferable to allowing geopolitical tensions to disrupt trade and investment flows.
Trade policy, she said, should provide businesses with greater certainty while taking into account countries' domestic development priorities and avoiding restrictions that unnecessarily fragment global markets.
Sitharaman said India's economic fundamentals have remained strong despite a series of global shocks over the past four years.
India's real GDP expanded 7.8 per cent in the first quarter of FY27, while the banking sector's gross non-performing assets have fallen to multi-decadal lows. Foreign exchange reserves were around USD 766 billion, she said.
The finance minister noted that the global economy continues to face multiple risks, ranging from sharp movements in crude oil prices and tighter US monetary conditions to increasing trade barriers, geopolitical conflicts and disruptions in the movement of oil and gas.
India's resilience, she said, has been supported by measures aimed at strengthening household finances, improving access to credit, reforming the banking sector, expanding infrastructure and maintaining price and fiscal stability.
While calling for private investment to take a larger role, Sitharaman also highlighted the government's continued commitment to capital expenditure.
The Centre has allocated Rs 12.22 trillion for capital expenditure in FY27. Including grants for the creation of capital assets, effective capital expenditure is estimated at Rs 17.15 trillion, equivalent to 4.4 per cent of GDP.
The fiscal deficit target for FY27 has been set at 4.3 per cent of GDP, reflecting the government's focus on maintaining fiscal discipline while supporting investment-led growth.
Sitharaman also cited the International Monetary Fund's projection that India's general government debt-to-GDP ratio could decline from 83.4 per cent in 2026 to 77.7 per cent by 2031.
The Finance Minister's remarks come as India seeks to sustain a high-growth trajectory while reducing its vulnerability to external shocks.
With public investment continuing to support infrastructure and capacity creation, a greater flow of private capital into manufacturing, technology and R&D is expected to be critical to the next stage of expansion.
UNI VK ATP RSA
Tags: #Private investment must lead India’s next growth cycle: Nirmala Sitharaman
More News

AMCCIE seeks rollback of gold hallmarking fee hike

04 Oct 2026 | 9:23 PM

Mumbai, Oct 4 (UNI) The Agrawal Marwadi Chamber of Commerce, Industries & Education (AMCCIE) has urged the Centre and the Bureau of Indian Standards (BIS) to withdraw the increase in gold hallmarking charges from Rs 45 to Rs 75 per article.

see more..

India targets import dependence in rare-earth magnets, energy as structural reforms continue: Shaktikanta Das

04 Oct 2026 | 7:36 PM

New Delhi, Oct 4 (UNI) India is working to build domestic capacity in critical sectors where it remains dependent on imports, including rare-earth permanent magnets, while continuing with structural reforms aimed at strengthening macroeconomic and financial stability, Principal Secretary-2 to the Prime Minister Shaktikanta Das said.

see more..

Tata Sons: Save the golden goose while protecting shareholder rights

04 Oct 2026 | 5:18 PM

Ninad D Sheth
New Delhi, Oct 4 (UNI) The Tata Sons dispute calls for regulatory flexibility, a fair deal for minority shareholders and protection of a rare philanthropic institution.

see more..

Private investment must lead India’s next growth cycle: Nirmala Sitharaman

04 Oct 2026 | 4:37 PM

New Delhi, Oct 4 (UNI) union Finance Minister Nirmala Sitharaman has called for a stronger role for private investment in India’s next phase of economic expansion, saying higher corporate capital expenditure and greater spending on research and development (R&D) will be crucial to sustaining growth amid rising global uncertainty.

see more..

India needs smarter regulation, not more rules: NITI Aayog Member

04 Oct 2026 | 3:07 PM

New Delhi, Oct 4 (UNI) NITI Aayog Member Rajiv Gauba has called for a shift towards light-touch and risk-proportionate regulation, saying India's regulatory architecture must evolve alongside technological advances, changing business models and shifts in the global economy.

see more..