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growth in employment R&D becomes more are already in place. The time CII’s research analysis of net there was a notable uptick in strengthened corporate with trading partners has ARDL model does not model. Additionally, two basis of Schwarz Information data sources, except data for
INDUSTRY SHOULD stimulates aggregate demand attractive, further enhancing is opportune for industry to fixed assets data from 4000+ absolute terms to Rs 25.1 governance. It has enabled opened new export markets require all variables to be dummy variables representing Criterion (SIC). employment and net fixed
EMERGE AS THE for goods and services, production capabilities and come forward and start non-financial private sector lakh crore in H2FY24 from Rs banks and financial institutions and enhanced its integrated of the same order, the global financial crisis and assets which have been
PRIMARY CATALYST FOR perpetuating a cycle of workforce skills. This creates investing to give the companies extracted from 24.2 lakh crore in both H1 to address non-performing competitiveness. With the thus accommodating both I(0) the Covid-19 pandemic were The analysis covers the obtained from RBI’s KLEMS
GROWTH BY CREATING consumption and production. a self-reinforcing cycle of high above-described virtuous CMIE Prowess Database FY24 and H2 FY23. This rise assets (NPAs) efficiently, signing of FTAs with countries and I(1) series without included to isolate the effects period from 1996 to 2022 database and CMIE’s Prowess
A VIRTUOUS CYCLE Additionally, the increased and sustainable economic cycle of growth the suggests that although a indicates improved leading to more robust like Mauritius, the UAE, necessitating pre-testing for of these significant economic using data at annual frequency. database, respectively.
production capabilities growth. much-needed momentum. moderation was witnessed in confidence and positive balance sheets and increased Australia, and the European unit roots. This is particularly disruptions. The lag length of Majority of the variables are
The multiplier effects of support higher exports, As per the latest data from year-on-year growth terms, sentiment among private confidence in the financial Free Trade Association advantageous given the mixed each model is selected on the sourced from government
private investment are opening new markets and Overall, private investment in the Central Statistics companies. sector. IBC, along with Asset (EFTA), Indian industry has order of integration often
extensive and multifaceted. deepening integration into a specific industry sets in Organization (CSO), private Quality Review of the RBI has gained access to global observed in macroeconomic
Private capex in an industry, global value chains, which motion a self-reinforcing cycle sector savings have increased Net Fixed Assets of Private Sector Companies helped in improving the markets, providing them with data. Further, the model
such as establishment of new further bolsters aggregate of growth that extends to from 10.0 per cent of GDP in (Rs Lakh crore) health of India's financial opportunities to expand allows us to capture both
manufacturing plants or income and employment ancillary industries and the 2011-12 to 11.2 per cent of 26.0 25.1 sector with low levels of production capacities and short and long-term dynamics
adoption of advanced opportunities. broader economy. This GDP in 2022-23, which could 25.0 stressed assets, high earnings, integrate into global supply between the variables,
technologies, leads to virtuous circle of growth is an be deployed for further 24.0 24.2 24.2 and strong capital and chains. thereby providing a nuanced
enhanced production As the economy grows, new adaptation of the investment. Corporate liquidity buffers. The understanding of underlying
capabilities. Efficient opportunities for investment Accelerator-Super Multiplier profitability has also 23.0 22.7 consistent reduction in gross The potential for private economic processes.
production processes result and innovation emerge, Model developed by Nobel improved in 2023-24 22.0 22.0 22.1 NPAs of Scheduled investment to drive India's
in expansion of industry's initiating a virtuous cycle of Laureates Paul Samuelson and compared to the previous Commercial Banks, from 11.2 economic growth and We estimate three separate
output, directly creating growth. As investment in John Hicks . fiscal year. Net profit of 21.0 per cent in 2018 to 3.9 per development is immense. The ARDL models to capture the
1
numerous jobs. The increase technological upgrades and private firms in Q4 of 20.0 cent in 2023, has resulted in government has done the dynamic relationship between
in employment raises the 2023-24 saw an annual H1 FY22 H2 FY22 H1 FY23 H2 FY23 H1 FY24 H2 FY24 an improvement in asset groundwork; it is now up to private investment, with Net
disposable income of growth of 16.2 per cent Note: Includes analysis of 4000+ non-financial private sector companies quality and adequately the private sector to take the Fixed Assets (nfa) of private
households, which in turn Increase in compared to 15.3 per cent in Source: CMIE Prowess Database, CII Research capitalized them to provide baton and lead India towards companies taken as a proxy,
Private
boosts the demand for goods Investment the same quarter of 2022-23, financing for investment sustained economic and specific economic
and services. indicating increased financial projects. prosperity. With favourable indicators, including real GDP
resources for investment. investment climate and growth (rgdp), employment
High Enhances business, has significantly
As production ramps up in a Economic productive Several factors reflect the GOVERNMENT HAS boosted investors’ confidence A slew of measures proactive engagement of growth (empl) and export
specific industry, it creates growth capacity anticipated rebound in CREATED CONDUCIVE and improved investment announced in the Union industry, private investment growth (export). Following
significant demand for raw Private Investment private sector investment. ENVIRONMENT FOR climate. Reforms to enhance Budget 2024-25, including will be the cornerstone of three models were used:
materials and components, creating Virtuous Capacity utilization in THE PRIVATE SECTOR ease of doing business such as setting up of integrated India's journey to becoming a
stimulating growth in the Cycle of Growth manufacturing has also risen TO UNDERTAKE the National Single Window technology platform for developed economy by 2047. Model 1: Real GDP growth
upstream sectors, thereby Increases Boosts to 76.5 per cent in Q4 of INVESTMENTS System, Shram Suvidha Portal improving outcomes under is dependent variable and key
forming backward linkages. production employment 2023-24 from 74.7 per cent and India Industrial Land Bank, IBC, reforms and Estimating the explanatory variables include
and
Simultaneously, increased exports in the preceding quarter, along with acts like the Jan strengthening of tribunal and net fixed assets, employment
output of the specific industry reaching well above the Vishwas Bill and The appellate tribunals to speed impact of growth and export growth
creates forward linkages by Stimulates long-term average of 73.8 Mediation Act 2023, have up insolvency resolution,
aggregate
stimulating growth in demand per cent. The latest round of A good investment climate collectively contributed to digitization of land records, private Model 2: Employment
downstream sectors, CII Business Confidence provides opportunities and creating a more favourable etc. are expected to further growth is a dependent
enhancing productivity and Survey (Apr-Jun 2024) reveals incentives for the private business environment, enhance ease of doing investments variable and key explanatory
competitiveness across these Indian economy has to shift that nearly half of the sector to invest profitably, thereby facilitating investment. business and encourage variables include net fixed
sectors. Consequently, gears such that industry PRIVATE SECTOR respondents expect capacity create jobs and expand Initiatives like PM Gati Shakti private investment. on key assets, real GDP growth and
investment in one industry emerges as the primary INVESTMENTS ARE utilization levels in their output. The government has National Master Plan and the export growth
creates a ripple effect in catalyst for growth by SLOWLY BUT STEADILY companies to be above 75 implemented several National Logistics Policy are The PLI scheme has emerged macroeconomic
ancillary industries, enhancing creating a virtuous cycle. This RECOVERING per cent in Q1 FY25 and 45 measures to create a aimed at improving as a key driver of domestic Model 3: Export growth is
demand, productivity and job virtuous cycle can help lift the per cent of respondents conducive environment for infrastructure and manufacturing growth and parameters dependent variable and key
creation through these Indian economy out of the The building blocks of growth, anticipate an increase in their private investment. connectivity, ultimately export competitiveness. By explanatory variables include
multiplier effects. middle-income trap and move characterized by domestic domestic investment plans reducing the cost of doing incentivizing production and net fixed assets, real GDP
towards the vision of macroeconomic stability, during this period. The Government’s focus on business and enhancing exports across 14 strategic CII Research has undertaken growth and employment
At an aggregate level, this becoming a developed nation robust policy mechanisms, increase in capacity utilization simplifying the business investments. industries such as electronics, time series analysis to growth
chain reaction of increased by 2047. It is essential for the strong external account, is likely to drive private environment through reforms automobiles, pharmaceuticals, empirically examine the
production and investment industry to now step in and physical & digital investment activity as like the reduction in The implementation of the and chemicals, the scheme is impact of private investments Rupee-US dollar exchange
leads to amplified production be an active participant in infrastructure impetus, businesses expand to meet corporate tax rates, Insolvency and Bankruptcy poised to spur investments on economic growth, rate, 10-year government
capabilities throughout the India’s growth story in the innovation and R&D thrust, demand. decriminalization of minor Code (IBC) in 2016 has and position Indian industry employment and exports securities yield and global
economy. The resultant Amrit Kaal. offenses, and initiatives to on a global scale. India's using the Autoregressive growth were also included as
foster ease of doing business substantially improved the strategic engagement through Distributed Lag (ARDL) fixed regressors in each
and reduce the cost of doing debt recovery mechanism and FTAs and preferential pacts model.
1 Subramanian, K. (2021, Sep 05). The Tectonic Shift in India's Economic Policy. Business Today.
https://www.businesstoday.in/magazine/columns/story/the-tectonic-shift-in-indias-economic-policy-304640-2021-08-20

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