India Inc.'s Q4 earnings season is going on in full swing and many heavyweights (such as Tata Motors CV, HAL, ICICI Bank) and have posted healthy profits.
However, RPG Group Chairman harsh Goenka pointed out that despite good corporate profits, private capital expenditure is stiill weak in India.
"This has been concerning the government rightly and our Hon FM @nsitharaman in particular," he stated in a post on X on Thursday.
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The chairman said that he spoke to a lot of businessman about this dilemma and concluded that there are seven key reasons behind it, namely:
- Policy and tax uncertainty
- Fear of unpredictable regulatory action
- Many new age companies including start-ups want to invest in asset light businesses over building factories
- Weak demand visibility in some sectors
- Long legal and approval delays
- Global diversification seen as safe hedge
- New generation in family-run businesses are more interested in family office investments rather than working hard.
Many X users resonated with Goenka's deductions. "Absolutely true. A nation cannot become a global power merely by creating traders, influencers, consultants and paper valuations. Civilizations become strong when they manufacture, innovate, build machinery, create supply chains and employ millions through productive industries," stated one user.
Another user highlighted that policy & tax uncertainty is biggest issue and couple with that retrospective amendment either in Income tax law or GST law.
"Any tax decision delivered by HC & SC in favour of industry is reversed by way of retrospective amendment. How can industry think of capex infusion," they underlined.
One user called regulatory interference a "nightmare" even for small businesses, calling it the main reason for lack of investment.
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