Not about demand and capacity.

"India's GDP crossed USD 3.5 trillion in 2022 and will be the fastest growing G-20 economy over the next few years, but reform and policy barriers could hamper investment, Moody's said. In a research report, the US based rating agency said bureaucracy could slow approval processes in obtaining licenses and setting up businesses, prolonging project gestation." ET. "It said a large young educated workforce, increasing nuclear families and urbanization will fuel demand for housing, cement and new cars." "The Reserve Bank of India's (RBI) 'State of the Economy' report for May said, in the first quarter 2023-24, growth is expected to be driven by private consumption, supported by reviving rural demand, and renewed buoyancy in manufacturing on easing input cost pressures." TN. "Based on available partial data for April 2023 and assuming a GDP growth rate of 5.1 percent for Q4, 2022-23, the economic activity index projects a GDP growth rate of 7.6 percent for Q1 of 2023-24. It also emphasizes that with manufacturing capacity utilization reaching and even surpassing trend levels in some industries, private capital expenditure needs to strengthen in order to expand capacity as demand increases." ABP. "Capacity utilization rate measures the percentage of an organization's potential output that is actually being realized." Investopedia. Which means that, if demand is so strong that a company is utilizing all its installed machinery and its labor, then it will spend on new investments to increase its profits. "Low capacity utilisation is one of the reasons for the poor interest of the private sector. Capacities already created are still underutilised and therefore, the economic reason to create additional capacities is limited," wrote Mahesh Vyas, CEO of Centre for Monitoring Indian Economy (CMIE). "According to the RBI's OBICUS, capacity utilisation through all of 2022 was well over 70%. It peaked at 75% in March." "But, this increase was not adequate to spur investments." "Fast-moving consumer goods (FMCG) companies are off to a slow start in the financial year 2024 due to downtrading-phenomenon of buyers moving towards smaller, low-packed packs. Four out of the six FMCG categories tracked by Bizom in both urban and rural areas witnessed downtrading in April 2023 as compared to the same month last year." TOI. Demand is soaring according to the RBI, but people are buying smaller packs. Are people fools? "Since 2012, private-sector investment as a share of Indian GDP has steadily declined. The World Bank and other experts attribute this trend to polarization and a growing lack of trust. While public investment has increased dramatically over the past decade, this can be a dangerous trend: When the government has disproportionate control over investment, it often leads to cronyism," wrote Prof Kaushik Basu. And hence, "Thanks to a 173-page report by a six-member panel appointed by India's Supreme Court, we now have a fairly good idea of where the country's probe into the Adani Group is headed: Nowhere," wrote Andy Mukherjee. Demand and capacity can't be talked up. When trust is broken.