New Delhi, Aug 7 — Private sector investment is witnessing steady and sustained growth, driven by the government's continued push on capital expenditure, but these companies need to invest more in R&D, Economic Affairs Secretary Anuradha Thakur said on Friday.
Addressing the National Council of Applied Economic Research's India Policy Forum 2026 event here, she said that the government’s capital expenditure has increased more than five-fold over the last decade from Rs 2 lakh crore in 2014-15 to Rs 10.7 lakh crore in 2025-26 as public investment continues to play a catalytic role by crowding in private investment.
Thakur said that a CII survey shows that private sector investment is moving upwards at a steady and stable pace.
However, she noted that private enterprise today accounts for 41 pe rcent of gross R&D in India, which falls short of the corresponding figure for advanced economies in which they account for nearly 75 to 79 per cent of gross R&D. "India's corporate ecosystem holds immense headroom to lead national innovation. Industrial dynamism ultimately will depend on the willingness of private enterprises to invest, innovate, and scale," she pointed out.
"Economic growth is increasingly driven by knowledge and technology rather than just the accumulation of labour and capital alone," she said.
The next stage of development requires stronger investment in research and development, greater collaboration between universities and industries, which should be the focus going ahead, the Secretary said.
"Our long-term growth story will be determined not only by the amount of capital we mobilise, but also by how effectively that capital is deployed to create productive assets, globally competitive industries, quality jobs, and transformative innovations. We are on that path," she further stated.
India's long-term growth will be determined by how effectively public and private capital is deployed to create productive assets, globally competitive industries, quality jobs and transformative innovations, she pointed out.
"Equally important is improving access to finance, particularly for micro, small and medium enterprises, which remain the backbone for manufacturing," Thakur said.
She also highlighted that despite a very challenging global environment, India continued to keep up its strong growth with stability.
The Indian economy has clocked an average growth rate of 7 per cent over the last three years, amid geopolitical tensions, energy market volatility, and fragmented trade patterns, on the back of strong domestic demand, she added.