The elephant's momentum.

"Investment: The Dog That Didn't Bark," wrote Chief Economist of the State Bank of India (SBI) Soumya Kanti Ghosh. TOI. Whenever Indians want to make a point they bring up the poor dog in Sherlock Holmes' Adventure of Silver Blaze (wikipedia) which didn't bark because the horse was the murderer, and since the horse was just defending itself it was entirely innocent. It is time we let the poor dog rest in peace. Who is the dog here? Those who are saying that private investment is weak. Not so, writes Ghosh. "Importantly, capacity utilization in the manufacturing space had touched a decade high of 76.3% as of March 2023." "For the four-year period ended 2022-23, incremental investment by the private sector was at Rs 7 lakh crore (Rs 7 trillion) as against Rs 7.5 lakh crore for the five-year period ended 2018-19." Four years of investments almost equal to five. But, the rupee was around 60 to one dollar in 2014 (Thomas Cook), while one dollar buys 83.20 this morning. xe.com. So, although the amount of private investment looks respectable in nominal terms it is much lower (almost 40%) in value terms. "Most importantly, consolidated private sector investment was at Rs 16.3 lakh crore (Rs 16.3 trillion) during FY20-23 (4 years) as against Rs 16.4 lakh crore in the pre-pandemic period of FY15-19 (5 years)." If private sector investment is roaring ahead, why, "Amid the speedy economic growth of India, the unemployment rate among graduates under 25 years of age touched a huge 42% post-Covid, compared to higher-secondary (21.4%), secondary (18.1%), middle (15%) and others, according to report published by Azim Premji University." Mint. "The report mentioned that since 1990s year-on-year non-farm GDP growth and non-farm employment growth were uncorrelated with each other." In the April-June quarter of 2023 "the private sector as represented by more than 3,000 listed firms, announced higher operating profitability (EBIDTA) reflecting robust performance," wrote Ghosh. If so, why no jobs? "In a recent research note, economists Nikhil Gupta and Tanisha Ladha of Motilal Oswal estimate that for the period April to June, corporate investments fell 6.2% in comparison with April-June 2022. They stood at 12.3% of GDP, the lowest in the first quarter of of any year in the past decade," wrote Vivek Kaul. Economist Dipanwita Mazumdar of Bank of Baroda "analysed the balance sheets of 3,420 companies and looked at the sum of fixed assets and capital work in progress, a representation of corporate investment. Over a five-year period from 2017-18 to 2022-23, the growth of this metric averaged 4.9% per year. Far lower than India's nominal GDP of 9.8% per year." The Indian economy is represented by the elephant, even though Anju Sahu disputes this. Swarajya. And, as in the old Indian fable, it depends on who is looking at it. wikipedia. Private or government.