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DOMESTIC INVESTMENT IN INDIA

Rise in domestic investments has been one of the biggest contributors to the India growth story and public and private sector have both enabled and sustained these investments. https://www.ibef.org/economy/domestic-investments

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DOMESTIC INVESTMENT IN INDIA

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  1. www.ibef.org IBEF

  2. What is Domestic Investment ? • Rise in domestic investments has been one of the biggest contributors to the India growth story and public and private sector have both enabled and sustained these investments. Following are the various investors driving domestic investments in the country: • Government/Public Sector Enterprises’ Capital Expenditure • Private Sector Enterprise • Banks/Financial Institutions/Domestic Institutional Investors • Retail Investors

  3. Market Activity Gross Fixed Capital Formation (GFCF) at constant 2011-12 prices was Rs 43.34 lakh crore (US$ 614.85 billion) in 2019-20. The Government had forecast capital expenditure to increase by 30 per cent from Rs 3 lakh crore (US$ 41.2 billion) in 2017-18 to Rs 3.9 lakh crore (US$ 53.6 billion) in 2019-20 Domestic institutional investors (DIIs) and foreign portfolio investors (FPI) together invested Rs 1.43 lakh crore (around US$ 20 billion) in 2019.

  4. Investments/developments • With the improving economic scenario, there have been quite a few investments in various sectors along with M&A in India. Some of them are as follows: • In 2019-20, institutional investment in Indian real estate stood at US$ 4.48 billion. • In 2019, FPI investment in Indian equities touched a five-year high of Rs 101,122 crore (US$ 14.47 billion). • The M&A activity in India stood at US$ 28 billion in 2019, while private equity (PE) deals reached US$ 48 billion. • In 2019, companies in India raised around US$ 2.5 billion through 17 initial public offers (IPO). • In April 2020, assets managed by mutual funds reached Rs 23.52 trillion (US$ 351.18 billion). • As of December 2019, Canada Pension Plan Investment Board, through its wholly owned subsidiary, CPPIB Credit Investment, committed to invest US$ 225 million in the Indian Resurgence Fund platform. • In November 2019, Adani Group announced plans to spend Rs 26,000 crore capex over the next five years, mainly focused on expansion of its airport business. • In 2019, India’s real estate witnessed an increase in investment by 8.7 per cent compared to 2018 and touched US$ 6.2 billion.

  5. Government Initiatives • The Prime Minister of India, MrNarendraModi announced various economic packages worth around Rs 20 lakh crore (US$ 283.73 billion), which was about 10 per cent of India's GDP. • PradhanMantriGaribKalyan Package (PMGK) was introduced in April 2020 to provide relief to underprivileged and help them fight the battle against COVID-19. Rs 1.70 lakh crore (US$ 24.12 billion) was allocated to the scheme. • In February 2020, cabinet approved the memorandum of understanding (MoU) signed between India and Iceland in the field of Sustainable Fisheries Development. 

  6. Road Ahead The Association of Mutual Funds in India (AMFI) is targeting nearly five-fold growth in assets under management (AUM) to Rs 95 lakh crore (US$ 1.30 trillion) and more than three times growth in investor accounts to 130 million by 2025. India’s attempt to implement reforms to unlock the country's investment potential is expected to improve business environment, liberal FDI policies, quick solution to corporate disputes, simplified tax structure, and a boost to public and private expenditure. To achieve the GDP of US$ 5 trillion by FY25, India needs to spend about US$ 1.4 trillion (Rs 100 lakh crore) over these years on infrastructure.

  7. THANKS FOR WATCHING

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