Importance of Public Investment in the Indian Economy
- Public investment has the potential to improve the infrastructure of a nation and thus attract more foreign direct investment (FDI).
- Public investment plays a crucial role in decreasing unemployment and generating new jobs. It is believed that every million dollar investment generates 6-8 new jobs.
- The public investment in the industrial sector increases the production capacity of India and thus increases the GDP of India.
- Public investment is quite crucial for the people living in rural areas. Investment in this sector helps in reducing poverty promotes agri-business, and also increases the annual agricultural produce of the nation.
- Public investments also provide tough competition to the private investors and retards their monopoly, offering competitive prices for basic goods and services.
Importance of Public Investment for Indiaâs Economic Growth
If you take a closer look at the economic growth of any nation, youâll find that it is mainly driven by the investments made in development works. However making huge investments in any economy is as not easy as it sounds, as huge investment canât be done by a single person, it usually involves a group of people (investors). However still any private organization of an individual canât invest much, thus in such a case, public investment becomes quite important. The public investment not only benefits the netizens by providing them better services at a cheaper rate but also boosts the economic growth of a nation.
For the financial year 2022-23, the Government of India has decided to increase the share of public investment by 35%.
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