Corporate investments missing link in India’s growth: Patra

Corporate investments are the missing links in the Indian economy which had a three-year average annual growth rate of 8.1% in fiscal 2024, according to former RBI deputy governor and economist Michael Patra.

India spends among the lowest per capita on physical infrastructure ($90), Dr. Patra said. “We need to raise investment from 3.5% to 6% of GDP in roads, ports, airports, water, and logistics.” he said, speaking at the Elara India Dialogue 2025, conducted by Elara Capital here on Monday. Dr. Patra said that access to clean potable water and such civic amenities should be part of infrastructure development.

He underlined the prospects of the Indian economy that need to be harnessed to surpass the size of the U.S. in the next couple of decades in terms of purchasing power parity, if it overcame one of the most formidable challenges — climate change. He further highlighted the need to increase utilisation of labour. He said that just about 54% of the Indian labour was employable and women’s participation in the labour force was among the lowest in the world. He suggested solutions such as creating a safe and dignified workplace as the way forward in improving women’s employment. He also emphasised the importance of overhauling the education system to improve quality of employment.

The former RBI deputy governor also said that there was a need to increase manufacturing value-added growth rate. The current growth rate is 5% and the sector should grow at the rate of 8.5%. He also said that India should increase share of global exports to 5% from the current 1% and that this was a feasible goal.

On the headwinds that one had to overcome to overtake the U.S. to become the largest global economy, he said India’s minimal reliance on external financing for growth and its reserve position, among others, could support its ambition.